Q3 2024 Enlight Renewable Energy Ltd Earnings Call
Okay.
Speaker Change: Good day, and thank you for standing by welcome to the enlarged third quarter 'twenty 'twenty four earnings call. Please be advised that today's conference is being recorded I would now like to hand, the conference over to Joe Norway's director of IR. Please go ahead.
Joe Norway: Thank you operator.
Speaker Change: Good morning, everyone and thank you for joining our third quarter 2024 earnings conference call for renewable energy.
Speaker Change: Before beginning this call I would like to draw participants attention to the following certain statements made on the call today, including but not limited to statements regarding <unk> business strategy and plans our project portfolio.
Speaker Change: Market opportunity utility demand as potential growth discussions with commercial counterparties and financing sources.
Speaker Change: Rising trends for materials.
Speaker Change: Progress of company projects, including anticipated timing after the approvals and project completion.
Speaker Change: Anticipated production today's expected impact from various regulatory developments completion of development the potential impact of the current conflicts in Israel on the operations and financial conditions and company actions designed to mitigate such impact.
Speaker Change: And the company's future financial and operational results and guidance, including revenue and adjusted EBITDA are forward looking statements within the meaning of U S. Federal Securities laws, which reflect management's best judgment based on currently available information.
Speaker Change: We referenced certain project metrics in this earnings call and additional information about such metrics can be found in our earnings release.
Speaker Change: These statements involve risks and uncertainties that may cause actual results to differ from expectations.
Speaker Change: Please refer to our 2023 annual report filed with the SEC on March 28, 2024, and other filings for more information on the specific factors that could cause actual results to differ materially from our forward looking statements.
Speaker Change: Although we believe these expectations are reasonable we undertake no obligation to revise any statements to reflect changes that occur after this call.
Speaker Change: Additionally, non <unk> financial measures may be discussed on the call.
Speaker Change: These non <unk> measures should be considered in addition to and not as a substitute for or in isolation from our results prepared in accordance with IRS.
Speaker Change: Reconciliations to the most directly comparable <unk> financial.
Speaker Change: <unk> measures are available in the earnings releases.
Speaker Change: And the earnings presentation for today's call, which are posted on our.
Speaker Change: Investor Relations webpage.
Speaker Change: With me. This morning argue argue FX CEO and co founder of a night.
Speaker Change: You had a CFO of a night and Adam Piszel C O and cofounder of <unk>.
Speaker Change: <unk> will provide some opening remarks and will then turn the call over to Adam for a review of our U S activity and then tenure for a review of our third quarter results. Our executive team will then be available to answer your questions.
Speaker Change: Thank you Jenna and thank you all for joining us today.
Speaker Change: This was an outstanding quarter for ignite and we're pleased to present, an extremely strong set of financial results for the first nine months and third quarter of 2024.
Speaker Change: Starting with the nine months results.
Speaker Change: Revenue was 56% to 285 million comparing the same period in 2023.
Speaker Change: Adjusted EBITDA grew 50% to 214 million.
Speaker Change: Net income dropped to 58 million, but excluding one off items grew by eight 2 million from $48 million to $56 million an increase of 17%.
Speaker Change: Cash flow from ops.
Speaker Change: Operations Rose by 25% to 158 member.
Speaker Change: Now for the third quarter results.
Speaker Change: Revenue was up 88% to 109 million.
Speaker Change: Representing strong operational performance.
Speaker Change: With new project additions.
Adjusted EBITDA grew 86% to 88 million and net income was 24 million versus 26 months ago.
Speaker Change: So excluding one off items grew by 57 million from $11 million to $26 million, an increase of 114% cash flow from operations rose to 66 million up 115%.
Speaker Change: On the back of these results. We are pleased to increase our 2020 guidance ranges for the second consecutive quarter.
Speaker Change: This represents an increase of an additional $10 million at the midpoint for both revenue and adjusted EBITDA guidance.
Speaker Change: They really expand in more detail.
Speaker Change: In light continues to rollout its major expansion plans on all fronts in this quarter so significant cod's.
Speaker Change: Difficult New project construction and a significant addition to our mature phase portfolio.
During the past nine months, we've added new generation capacity of 500 megawatts and the new energy storage capacity of one five gigawatt hour cooperation of our portfolio.
Speaker Change: These include at risk of solar and storage project in New Mexico.
Speaker Change: Additional project in Europe in a minute.
Speaker Change: This capacity is expected to contribute approximately $105 million in revenues and $80 million in EBITDA in 2025.
Speaker Change: In addition, we have begun construction on 810 megawatts of generation and more than two gigawatt hour storage of three additional projects in the U S.
Speaker Change: Which are expected to contribute 137 million in revenue and 110 million in EBITDA.
Speaker Change: Then annual basis when fully operational.
Speaker Change: In the next three years, our global generation energy storage capacity will triple reaching six gigawatt generation seven six gigawatt hour energy storage by 2027.
Speaker Change: The demand for electricity in the United States is soaring.
Speaker Change: Power consumption is driving fast attributed to the electricity needs of data centers AI and electric vehicles.
Speaker Change: It's estimated the data centers alone will consume approximately 12% of the country's electricity output by 2030.
Speaker Change: From about 3% in 2023.
Speaker Change: As a result of this trend PPA prices continue to remain high.
Speaker Change: Reflecting high returns for more projects.
Speaker Change: We believe that the market critical need for electricity will continue to intensify the need for projects.
Speaker Change: Given these conditions potential changes in future regulations on tariffs and tax incentives may have more of an impact in electricity prices and less on the building of new project.
It's Richard.
We are also securing growth in 2026 2027 and beyond this quarter, we are introducing snowflake a into a mature facebooks failure with a capacity of 600 megawatts of solar and one nine gigawatt hour energy storage.
Speaker Change: As well as announcing a 20 year PPA for this project with a resounding Aps.
Speaker Change: Snowflake is a high return project that is expected to begin construction as early as mid 2025.
Speaker Change: Adam <unk> CEO cleaner will expand on all these development just a bit.
Speaker Change: The favorable variance between our optic price cost of equipment and cost of capital continues to generate high returns for our projects.
Speaker Change: As shown in our financial reports and releases.
Speaker Change: Our unlevered asset returns reached double digits and reflect attractive mid teens returns after leverage even at the current interest rates, which have already started to decline.
Speaker Change: Our European project are benefiting from very strong market conditions.
Speaker Change: Revenues this quarter were up 24% comparing to last year.
Having said electricity prices reached their highest points this year and are resulting in excellent returns at Takoma. We're.
Speaker Change: We have hedged 65% ecommerce anticipated 2020 for generation for 100, Europe a megawatt hour.
Speaker Change: They've already have built substantial hedge for 2025, which covered 60% of next year's anticipated output at a price of 65, Europe a megawatt hour.
Speaker Change: With new capacity Commission and large scale development portfolio, we see continuous growth in this geography.
Speaker Change: Mirror is showing significant growth this year fueled by the rapid expansion in solar and storage clusters.
Speaker Change: The strong ramp up of Genesis Windfarms, one of Israel's largest renewable energy project.
Speaker Change: As a result revenue this quarter were up 223% for this region compared to last year.
Speaker Change: This quarter, we achieved a three.
Speaker Change: Three new solar and storage projects completing the tour site solar and storage cluster with a total capacity of 248 megawatts and 625 megawatt hours.
Speaker Change: We expect the complete cluster to generate revenues of $35 million.
Speaker Change: <unk> EBITDA of $25 million in 2025.
Speaker Change: On the oft excited in Israel during the third quarter, we signed three new corporate Ppas with clients in electronics.
Speaker Change: Manufacturing sectors.
Speaker Change: <unk> entered into a total of nine corporate ppas. So far this with annual consumption volumes of 105 megawatts.
Speaker Change: To sum up we are proud to repeatedly showed strong results and increased guidance ranges.
Speaker Change: Solid offtake demand lower equipment cost and declining interest rates support our attractive project weekends.
Speaker Change: We believe the demand will continue to drive growth in all geographies, even under different incentive regimes.
Speaker Change: And with any potential change in tax incentives.
Speaker Change: Translate into higher electricity prices.
Speaker Change: <unk> negatively impact project deployment or return.
Speaker Change: We'll continue converting our very large the political and portfolio into mature stage projects driving higher revenues and profits.
We now like to hand, the call over to Adam.
Adam Piszel: Thank you Elon enlighten cleaner are achieving great milestones in fulfilling our substantial growth objectives for the U S market.
Adam Piszel: This quarter highlights the magnitude of these objectives and some great achievements. We've made as we continue to successfully deliver quality construction projects and exciting development assets.
Adam Piszel: We are in the final steps of <unk> energy storage CRD in new Mexico.
We are starting construction on major projects all located in the Western United States and lastly, we announced the signing of the Snowflake a PPA.
Another large project entering and lights mature portfolio at near our TV status located in Arizona.
Adam Piszel: Together. These five projects totaled approximately one eight gigawatts of solar and $5, one gigawatt hours of energy storage capacity.
Adam Piszel: In October we achieved full CRB on the solar portion of the Trustco located near Albuquerque, New Mexico.
Adam Piszel: This project includes 364 megawatts of solar and one two gigawatt hours of energy storage.
Adam Piszel: We are completing the energy storage connection to the grid and expect full CRD for the energy storage portion in the coming weeks <unk>, which is one of the largest solar and battery projects in the U S.
Adam Piszel: And clean Earth flagship project.
Adam Piszel: Completion paves the way forward to begin the next stages of our expansion in the U S market.
Adam Piszel: We are starting construction on three projects with a total of 810 megawatts of solar and over two gigawatt hours of energy storage capacity.
Adam Piszel: First country acres at 392 megawatt solar and 688 megawatt hour energy storage project in California has started construction.
Adam Piszel: Gaining with improvements to adjacent public roads needed to accommodate construction traffic into the site.
Adam Piszel: Work has also begun on the TV side.
Adam Piszel: We are also excited to partner with the University of California Davis to include aggregate tax on a portion of this project to further study dual land uses and utility scale solar sites.
Adam Piszel: This project is expected to achieve <unk> in the second half of 2026.
Moving from California East to Arizona, located 60 miles east of Tucson, Our Roadrunner project includes 290 megawatts of solar and 940 megawatt hours of energy storage.
Adam Piszel: I am pleased to report we have secured all regulatory permits for this project.
Adam Piszel: Construction crews are mobilized and work to build a road networks throughout the site is underway with.
Adam Piszel: The project is scheduled to achieve.
Adam Piszel: <unk> in the second half of 2025.
Adam Piszel: Well ranch and expansion of the <unk> project outside Albuquerque, New Mexico will begin mobilization in December.
Adam Piszel: Leveraging the trust because interconnection quell ranch brings an additional 128 megawatts of solar and 400 megawatt hours of energy storage to our portfolio.
Adam Piszel: All required permits have been approved and site work will begin by the end of the year, we anticipate completing commissioning on this project by the end of 2025 and.
Adam Piszel: In parallel to these activities. We are also closing in on financing and tax equity arrangements for each project. We look forward to providing you with more updates on the financing of these projects early next year.
Adam Piszel: I'm also excited to introduce the first phase of the Snowflake complex located in northern Arizona.
Adam Piszel: This overall complex consists of over a gigawatt of land and interconnection rights. We are in the final stages of design and permitted for the first phase of this complex, which we are calling snowflake solar.
Adam Piszel: As recently announced we have secured a power purchase agreement with Ats for this first phase, which includes 600 megawatts of solar generation in one nine gigawatt hours of energy storage.
Adam Piszel: The PPA offers a solid economic foundation for the project, which is scheduled to begin construction in 2025 with CRD anticipated.
Adam Piszel: Mid 2027.
Adam Piszel: Achieving this milestone for snowflake exemplifies our ability to convert high quality assets from our advanced development portfolio and the projects ready for construction.
Adam Piszel: Both in terms of size and profitability Snowflake isn't impactful project to the overall <unk> portfolio.
On a broader level snowflake as an example of how the U S energy market provides a positive backdrop for our project fundamentals.
Adam Piszel: The scarcity of new projects, especially very large projects like snowflake, along with growing demand for energy drives positive tailwind for electricity prices combined.
Adam Piszel: Combined with decreasing equipment prices and interest rates. These trends result in attractive Unlevered returns for our current and future projects in the U S.
Adam Piszel: Lastly, our global supply chain strategy and deep relationships have continued to be a strength.
Supply contracts for Roadrunner are completed and we expect to sign the remaining contracts for both quail ranch in country acres of this month.
Adam Piszel: With our strong supplier partnerships, we've been able to secure competitive pricing and a good resilience against potential trade impacts.
Adam Piszel: This resilience comes in part from contractual terms, but also domestic supply.
Adam Piszel: In conclusion, our third quarter results highlight our team's incredible ability to continue to overcome the ever present market and supply chain hurdles and execute on our substantial growth objectives in the us I look forward to continuing to share this developing growth story on future calls.
Speaker Change: Now ill turn the call over to near for a review of our quarterly results near.
Speaker Change: Thank you Adam in the third quarter of 24, the company's revenue increased to $190 million up from $58 million last year, a growth rate of 88% year over year growth was mainly driven by new projects compared to last year as well as higher production at our existing projects and better mentioned prices.
Speaker Change: Since the third quarter was 23 12, new project in the U S Hungary, and Israel started selling electricity. The most important of these is genesis, which contributed $15 million revenue, followed by diesel and storage and solar cluster, which added an additional $16 million okay camera.
Speaker Change: Revenue increased 40% year over year to $18 million.
Speaker Change: The project benefited from positive pricing and production trends, we sell the electricity at an average of 96 per megawatt hour.
Speaker Change: <unk> 76 per megawatt hour for the same period last year, while production was up 8% from the same period last year. The average price realized truth, our hedging strategy with 100 Arab per megawatt hour covering 69% of the quarter's production merchant prices.
In Spain during the quarter reached their highest point this year.
Speaker Change: Third quarter net income decreased from $26 million last year to $24 million. This year, a decline of 7% yields.
Speaker Change: The impact of new and existing project debt.
Speaker Change: $10 million this was reduced by a $4 million loss on the revaluation of foreign currency asset.
Speaker Change: In contrast in Q3 23, the company recorded a 6 million noncash profit on the mark to market of interest rate hedges linked to a critical financial close.
A number of other income items impacted the current quarter, resulting in a $15 million benefit in comparing zone. Other income items in Q3, 23 amounting to a $16 million benefit.
Speaker Change: In the third quarter of 2004, the company adjusted EBITDA grew by 86% to $88 million compared to 47 million for the same period in 2003.
Speaker Change: Adjusted EBITDA growth was driven by the same positive factor, which affected our revenue growth and which contributed 49 million offset by an addition of $9 million in higher operating expenses linked to new project and 3 million increasing overhead.
Speaker Change: Other income included $10 million in compensation from Siemens linked to inadequate performance of turbines at the <unk> project in Sweden compared to $8 million from the sale of noncore assets in Q3 23.
Speaker Change: Looking to our balance sheet.
Speaker Change: It was approximately 133 million in gross proceeds of debt in Israel. After the balance sheet debt by with expanding its existing CSD notes traded on the Tel Aviv stock exchange.
Speaker Change: The notes will sell the effective yield of six 3% with a duration of three seven years. In addition in light of $320 million revolving credit facility at Israeli and international banks, none of which have been drawn as of the publication of this report.
Speaker Change: Moreover, in the third quarter of 2000 and cash flow from operation was $66 million, an increase of 150% year over year.
Speaker Change: Moving into 'twenty full guidance given the strong set of result, we delivered for the third quarter and first nine months of 'twenty. Four we are raising our financial outlook for the year our range for 'twenty full revenue guidance.
Speaker Change: $355 million to $370 million from $345 million to $360 million previously and our adjusted EBITDA guidance range.
Speaker Change: $255 million to $270 million from $245 million to $260 million. Previously this represents an increase of $10 million from previous midpoint for both metrics and further demonstrate the financial strength of the company as it continues to deliver rapid growth and expansion.
Speaker Change: I will now turn the call over to the operator for questions.
Thank you.
Speaker Change: To ask a question. Please press star one on your telephone.
Speaker Change: For your name to be announced.
Speaker Change: Do we still have your question. Please press star one on one.
Speaker Change: Once again Thats star one on one.
Speaker Change: If you wish to ask a question.
Speaker Change: We will now take the first question.
Speaker Change: From the line of Justin Clare from Roth Capital Partners. Please go ahead.
Speaker Change: Hi, good morning.
Speaker Change: Hey, good morning over here.
Speaker Change: Good morning, and doing well so first off wanted to start here with the change in the administration in the U S. It does look possible that we get changes to the IRA incentives one possible change thats being discussed as an earlier phase down of the ITC or the PTC.
Speaker Change: So I was just wondering if you could talk about whether you're safe harboring projects to ensure that they qualify for the ITC or PTC and if so how far is the future you may be looking at safe harboring.
Speaker Change: Okay. Thank you very much for the question I'll start and Adam you can complement me if you want so basically I think the two strongest point for us.
Speaker Change: In the U S is one the power demands the power demand in the U S is soaring utilities need electricity from us and they need our projects, we have very high quality project with the project construction or being constructed.
Speaker Change: And we.
Speaker Change: We see a lot of demand for that the second point is that 95% of the queue.
Speaker Change: For interconnection in the U S. Until 2030 is comprised of renewable energy projects. So what we see at the moment is renewable energy projects, whether the market of ours are the answer to the sorting and needs.
Speaker Change: Electricity in the U S.
Speaker Change: And if you look on on incentives of course, and this is a policy the policy question naturally.
Speaker Change: When different administrations, we believe there is a balance between the incentives.
Speaker Change: From one side the tariff so the tariffs on trade.
Speaker Change: On the other side and electricity prices on the other side. This is like a triangular so we believe that in the markets, where you see a very strong demand.
Speaker Change: And if there is an administration that is going.
Speaker Change: Yes, so we believe.
Speaker Change: Okay.
Speaker Change: The projects are.
Speaker Change: Completion.
Our supply, but maybe the electricity prices. Okay. So the way we see it we strongly believe there is a need for our projects and for renewable energy projects there might be development of additional projects, maybe fossil fuel power stations, but project that will be developed and will be completed.
Are going to be constructed and maybe a.
Speaker Change: Power prices may also balance between the different aspects of this triangular.
Speaker Change: Okay, I'll just add to that Justin Thank you for the question.
Certainly we are safe harboring and have been following that strategy for some time.
Speaker Change: Well into the future.
And I think in addition, I would say that.
Speaker Change: We've been through.
Speaker Change: Minera alone.
Speaker Change: Jason and I started two other solar companies as well so we've been in the business since 2007.
Speaker Change: Through multiple.
Speaker Change: Different iterations of administrations.
Speaker Change: And as <unk> said, the project fundamentals and the demand ultimately drive these projects getting put into the ground and so.
Speaker Change: We're certainly and have been focused on strategies to overcome the challenges that we see in any.
Speaker Change: Future administration.
Speaker Change: Got it okay I appreciate it.
Speaker Change: So.
Speaker Change: Maybe shifting to another topic here you mentioned that.
Speaker Change: I think the <unk> project is moving out one year here.
Speaker Change: Can you provide a little bit more detail on the Aps interconnection reform process How's that progressing.
Speaker Change: What led to the decision to delay the project and then how current or how confident are you in the in the current timeframe.
Speaker Change: And then also I think.
Speaker Change: I believe snowflake is in the same region can you comment on where that project is in the interconnection process.
Speaker Change: And weather.
Speaker Change: You still need to secure the interconnect there.
Speaker Change: Yes.
Speaker Change: Again, I don't maybe Janet start Jamie.
Speaker Change: Then of course, you will slow down.
Speaker Change: The deeper analysis.
Speaker Change: So maybe I can start with the lighter side of the questions. Because I think this show, how deep and light and cleaner portfolio using the U S.
Speaker Change: One project is being delayed and we are.
Speaker Change: We have a very very large project that is similar in size that is being ahead of schedule and is replacing it. So if you look in terms of capacity.
Speaker Change: One $120 million to $130 million in revenue Snowflake has been.
Speaker Change: Moving forward <unk> is slightly moving ahead, but it still deep within our plans for 2007 and I think this is a strong point and if you put a focus on what's in light has been doing in the U S. Since the acquisition. So you can see that the first wave of project <unk>.
Speaker Change: Apex is already delivered is.
Speaker Change: Connected.
Speaker Change: <unk> is going to contribute 65 million.
Speaker Change: The first wave of projects are being constructed.
Speaker Change: Attracting quite a range country acres.
Speaker Change: In road runner. So there are going to be.
Speaker Change: Place.
Speaker Change: In 25, and 26, they will contribute twice already so $1 $35 million and a third wave where steel bar and snowflake and other projects are going to be delivered between 27 and 28 lets say that are there.
$300 million, so again more than twofold in terms of size and all of these portfolios happening. So we are delivering one one wave is already connected contributing the other is under construction and on the third wave Adam will now provide the details on the certainty that we have on snow.
Speaker Change: Lake NCL bar.
Speaker Change: Yes.
Speaker Change: Okay, great. Thank you give odds.
Speaker Change: Yes first of all very complex set of circumstances of course on <unk>.
Speaker Change: To start off the system is co owned by six separate utilities with different utilities, managing various portions of the system. That's in Navajo transmission system, which as you can imagine having six different utilities.
Involved makes it very complicated while that's true.
Speaker Change: Aps does manage the process.
And all studies and documentation has to be created and executed by them as well as all of the other parties.
Speaker Change: We have.
Speaker Change: A lot of confidence on our new data that we've provided.
Speaker Change: Sat down with the leadership and the Aps of course manages the process.
Speaker Change: They're very very eager to have that resource online.
Speaker Change: Are as concerned as we are and so there they are doubling down and focused in on that process the schedule that Dave outlined.
Speaker Change: It has the ALJ being executed in the second half of 2025, we've given ourselves a diff additional buffer just to make sure that we can hit those states.
Speaker Change: But as <unk> mentioned.
Speaker Change: Snowflake.
Speaker Change: We're able to bring that project and Thats it.
Speaker Change: It is the benefit of having a very robust portfolio.
Speaker Change: <unk>.
Speaker Change: And frankly, a team that's able.
Speaker Change: The shift to other projects in.
Speaker Change: Resources, including all of our partnerships, we are able to do that and snowflake is much different.
Snowflake is not in this kind of this kind of a cluster situation.
The snowflake at.
Speaker Change: While they're both in Arizona are completely different electrical regions within the Aps balancing authority and.
Speaker Change: And snowflake was not part of the Aps SKU transformation, So snowflake has and LGA already in hand, and all green lights from the interconnection standpoint, so that.
Speaker Change: That project is moving forward.
Okay, great good to hear thanks for the time.
Speaker Change: You bet.
Speaker Change: Thank you.
Speaker Change: We will now take the next question.
Speaker Change: From the line of Jack Harley from Mizuho. Please go ahead.
Hey, how are you guys. Thanks for taking my question I just got two year for you in terms of flexibility for Ppas for projects that have not started construction.
Speaker Change: Interest rates were to rise or the ITT ITC PTC or remove let's say by the Trump administration with no Safe Harbor do you guys have flexibility in that regard.
Speaker Change: Hi, Jack Thank you for the question so in general as we are.
Speaker Change: As we announced in the past we have amended the multiple.
Speaker Change: Ppas of the.
Speaker Change: The company when the external circumstances have occurred.
Leigh.
Speaker Change: Terry's or regulation, so utilities tend to.
Speaker Change: Understand.
And share with us.
Speaker Change: Actually the need for the project and they need the.
Speaker Change: To adjust.
Speaker Change: The offtake price to these kind of developments. So we have a good track record in that its not promised but until today, we have a very good track record in doing that if these guidance developments occur.
Speaker Change: Thanks, It looks like the snowflakes are pretty good nice contract with a PPA, let's say around 70 to 80 per megawatt hour can you touch on any equity needs and the timing you may have for that to fund snowflakes are other projects that are entering that next the next phase.
Speaker Change: Uh huh.
Speaker Change: Yeah.
Speaker Change: To take that.
Speaker Change: Sure.
Speaker Change: Yes. Thank you.
Speaker Change: As mentioned this is a quite advanced projects.
Speaker Change: We expect.
Speaker Change: To start the <unk>.
Speaker Change: The financing process, we didn't.
Speaker Change: A few weeks now.
Speaker Change: And given the status of the project.
We believe.
Speaker Change: That will be it will be in a position very well.
Speaker Change: <unk> positioned to finance of course, the project without exceeding much the equity needs which is.
Speaker Change: Currently around.
Speaker Change: I think <unk> in the table that we presented is between 15% to 20% of the.
Speaker Change: Of the total capex.
Speaker Change: If we will exceeded the batesville for that purpose, we have the revolvers that will cover their needs between the.
Speaker Change: Constructing the project, which we would not delay the construction until we close the financing in which da da the senior debt.
Speaker Change: Again, the revolvers will nevertheless.
Speaker Change: Two can start without any constraints.
Speaker Change: Timeline, but given the status of the project we are very optimistic about the.
Speaker Change: None of the project, including the financing book.
Speaker Change: Yes, I can add to it.
Speaker Change: Words that we believe.
Speaker Change: Project like Snowflake is quite convenient to finance because.
Speaker Change: Yes.
Speaker Change: The structure of the project.
Speaker Change: Yes.
Speaker Change: <unk> asked the offtake as you said the fact that he is a bus bar PPA for 20 years no risk on the Allstate Prize.
Speaker Change: <unk> payments toward the LNG storage.
Speaker Change: In terms of.
Speaker Change: The engineering side, so flat terrain very high radiation resource so very strong fundamentals of the project. So what we see is very strong demand from lenders.
Speaker Change: This guidance projects.
Speaker Change: Therefore.
Speaker Change: We expect as near said that we will finance it with a.
Speaker Change: Very attractive for us.
Speaker Change: Net equity ticket.
Speaker Change: Got it thanks I appreciate it guys.
Speaker Change: Thank you.
Speaker Change: We will now take the next question.
Speaker Change: From the line of Steve Fleishman from Wolfe. Please go ahead.
Speaker Change: Okay.
Speaker Change: So David Paz Christy punishment. Thanks.
Speaker Change: Morning.
Speaker Change: Just had a couple of quick questions. Thank you for all the content.
Slide.
<unk> in the U S growth just want make sure I understand.
Speaker Change: Can you maybe.
Speaker Change: Take this slide.
Speaker Change: And help US gauge, it's just growth in the U S. I think if we look at 'twenty seven.
Speaker Change: EBITDA.
Speaker Change: Relative to the overall growth of the company.
Maybe in other words is it do you.
Speaker Change: What percentage of the U S.
Speaker Change: EBITDA do you expect coming from the U S by 27.
Speaker Change: Yes, so we still didn't provide.
Speaker Change: Forecast for 2007 for the overall comp of the year.
Speaker Change: Of the company so what I can say Steve is that obviously as you can see we are investing a lot in the U S.
Speaker Change: Have strong project with <unk>.
Speaker Change: Very very attractive EBITDA that are coming in tomorrow, I think that the capacity is that even if it's spread between 27% 28 series C. The very very high growth.
Speaker Change: In the U S.
Speaker Change: In the U S is becoming more and more dominant so in 2005, we expect the EBITDA to be around 15% one 5%.
Speaker Change: Total in light in 2006, it will be higher and going forward.
Speaker Change: It would be higher because of the size and the capacity of these projects.
Speaker Change: Okay that makes sense, thank you and maybe one follow up.
Speaker Change: On EBITDA 2040, but the guidance.
Speaker Change: Reyes.
Speaker Change: I think.
Speaker Change: Correct me if I'm wrong.
Speaker Change: Did your original EBITDA or at least your previous EBITDA guidance include the 10 million compensation from Siemens.
Speaker Change: Yeah.
Speaker Change: Near will take that thank you.
Speaker Change: Yes of course.
Speaker Change: <unk> is coming from CMS for the purpose of compensating VA revenues that we expect to generate during the year.
Speaker Change: Naturally there is things in Leds or revenues at Spotify.
Speaker Change: EBITDA in that regard.
Speaker Change: It's not a supply to be included in the EBITDA.
Speaker Change: The sources of it its not by generating electricity.
Speaker Change: But.
Speaker Change: By getting the idea for me from Siemens.
Speaker Change: Okay, great. Thank you.
Speaker Change: Thank you.
Speaker Change: We will now take the next question.
Speaker Change: From the line of Michael <unk> from J P. M. Please go ahead.
Speaker Change: So this is Michael on for Merck.
Speaker Change: Just wondering if you guys could give some more color maybe on the development portfolio.
Speaker Change: Past 2027, what markets do you see growth coming from and then kind of how are you thinking about your longer term development asset within the PJM market at this stage. Thank you.
Speaker Change: Yes, Thank you very much Michael so.
Speaker Change: If you look on our presentation slide 11, so what you can see that we factor together solar and storage.
Speaker Change: In.
Speaker Change: Order to give you some kind of equivalent size of our portfolio and altogether. We are talking about 30 factored gigawatt that are comprising R. R.
Portfolio.
Speaker Change: I think again, we see trends within the debt the depth of the portfolio. So if you can see on the mature phase we have 85 projects, so either yielding already or approach in construction.
Speaker Change: The capacity of eight two factor gigawatt.
Speaker Change: And advanced phase fourth quarter, which means projects that are going to be constructed between one and two years from now.
Speaker Change: We have additional six four gigawatts that are approaching construction and additional 14.
Gigawatts that are under various phases of development, but sometimes very advanced okay. If you look on the development phases basically they are comprised of the land rights of every project the permitting the offtake and the interconnection primarily demo the external access of development and internally of course, we have the financing in engine.
Speaker Change: Hearing and we are advancing this project also.
Speaker Change: Well I would say for all phases of our portfolio. So when we say that we have 30 gigawatts of portfolio. It means that we have as you see it bounces around.
Speaker Change: 200 projects that are being boost in all access of development.
Speaker Change: And.
Speaker Change: In this way we can speed the projects for construction and get I believe is as a developer is if youre ablate developer and IPP is very very good visibility towards our I would say our forecasts.
Speaker Change: Forecast, our guidelines and our revenues.
Speaker Change: So we see this I would say this growth continuing onwards. After 2728 29 30 based on the current portfolio as you see that is very deep and of course, we are constantly.
Speaker Change: Enlarging the portfolio.
Speaker Change: So we are looking for additional projects additional segments.
Speaker Change: In various areas and I think that the fact that in light is very balanced.
Speaker Change: And diversified between geographies between the U S Europe and manner and also between technology segments, we're very balanced between wind solar and storage disk and fuel our growth because from this growing market and also these segments represent the majority.
Speaker Change: And the vast majority of the growth in renewable energy worldwide.
Speaker Change: Great. Thank you and then maybe just as a follow up I think in PJM could you just help us think about the size of your development portfolio in that market.
Speaker Change: And then I think in the past you've talked about potential opportunities for capital recycling in that market.
Speaker Change: Maybe just an update on your thinking there. Thank you.
Speaker Change: Yes, Adam would you like to take this question.
Adam Piszel: Yes, I'm happy to take the question. Thank you Michael PJM is an area that we continue to focus on we're continuing to develop.
Adam Piszel: And work through the challenges that are there there are certainly some constraints to overcome.
Adam Piszel: In terms of.
Adam Piszel: Of capital.
Adam Piszel: Really again, our focus is not on that right now we're really just pushing that development forward on these projects.
Adam Piszel: <unk> developed.
Speaker Change: Great. Thank you.
Thank you as a reminder, if you wish to ask a question. Please press star one on one on your telephone.
Speaker Change: Star one on one if you wish to ask a question.
Speaker Change: There are no more questions at this time I would like.
Speaker Change: Now like to turn the conference back to you or not wise for closing remarks.
Speaker Change: Thank you very much for joining and we look forward to speaking with you next quarter.
Speaker Change: Yeah.
Speaker Change: This concludes today's conference call. Thank you for participating you may now disconnect.
Speaker Change: Yeah.
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