Boralex Inc. (BRLXF) Q4 2022 Earnings Call Transcript

Boralex Inc. (OTCPK:BRLXF) Q4 2022 Earnings Conference Call February 24, 2023 11:00 AM ET

Company Participants

Stephane Milot - Senior Director, IR

Patrick Decostre - President and CEO

Bruno Guilmette - EVP and CFO

Conference Call Participants

David Quezada - Raymond James

Rupert Merer - NBC

Sean Steuart - TD Securities

Mark Jarvi - CIBC

Nelson Ng - RBC Capital Markets

Ben Pham - BMO

Andrew Kuske - Credit Suisse

Naji Baydoun - IA Capital Markets

Nicholas Boychuk - Cormark Securities

Operator

[Foreign Language] Good morning, ladies and gentlemen, and invited to nan Boralex Fourth Quarter of 2022 Financial Results Conference Call. Please statement that each lines are successful listen-only mode. [Operator Instructions] Please besides statement that nan convention is being recorded.

For webcast participants, you whitethorn besides inquire questions during nan conference, but they will beryllium answered by email aft nan call. Finally, media representatives are invited to interaction Camille Laventure from Boralex, and her interaction accusation is provided astatine nan extremity of nan quarterly property release.

And I would for illustration to move complete nan convention to Mr. Stephane Milot, Senior Director, Investor Relations for Boralex. Please spell ahead, sir.

Stephane Milot

[Foreign Language] Thank you, operator. So bully morning, everyone. Welcome to Boralex 4th fourth and twelvemonth extremity results convention call. So joining maine coming connected nan telephone is Patrick Decostre, our President and Chief Executive Officer; Bruno Guilmette, our Executive Vice President and Chief Financial Officer; and different members of our guidance and finance teams.

So Mr. Decostre will statesman pinch comments astir marketplace conditions and nan highlights of nan quarter. Afterward, Mr. Guilmette will transportation connected pinch financial highlights and past we will beryllium disposable to reply your questions.

As you know, during this call, we will talk humanities arsenic good arsenic forward-looking information. So erstwhile talking astir the future, location are a assortment of consequence factors that person been listed successful our different filings pinch securities regulators, which tin materially alteration our estimated results.

So these documents are each disposable for consultation astatine sedar.com. In our webcast position document, nan disclosed results are presented some connected a consolidated ground and connected a mixed basis. When talking astir nan results, we mostly -- sorry, mostly mention to mixed numbers. And erstwhile referring to rate travel and equilibrium sheet, we mostly mention to consolidated numbers.

So please statement that mixed is non-GAAP financial measures and it does not person standardized meaning nether IFRS. Accordingly mixed whitethorn not beryllium comparable to likewise named measures utilized by different companies. So for much details, spot nan non-IFRS and different financial measures conception successful our MD&A. The property release, nan MD&A and nan consolidated financial statement, arsenic good arsenic nan yearly study and a transcript of today's presentation, are each posted connected our website astatine boralex.com nether nan Investors conception arsenic good arsenic nan -- our CSR report, which has been besides published today.

So if you wish to person a transcript of these documents, please interaction me. Mr. Decostre will now commencement pinch his comments. So please spell ahead, Patrick.

Patrick Decostre

Thank you, Stephane. Good morning, everyone.

It's a pleasance for maine to coming our results and achievements for nan 4th fourth and fiscal twelvemonth 2022. 2022 has been a very progressive twelvemonth for Boralex. I'm very proud to opportunity we surpassed nan 3 gigawatt of accumulation capacity this year, while increasing our AFFO by 34% successful nan 4th fourth and 27% successful fiscal twelvemonth 2022. We ended nan twelvemonth pinch an AFFO per stock of $1.63, a 27% summation complete 2021. Our dividend payout ratio was 41%, meaning we reinvested 59% of our AFFO into maturation projects.

At nan very extremity of nan year, we closed a important transaction successful nan U.S., adding 447-megawatt to our capacity, but besides bringing promising upside for Boralex while diversifying our upwind resources. Our teams showed agility, invention and imagination successful nan bonzer marketplace conditions associated pinch nan power situation successful Europe arsenic good arsenic ostentation and world proviso concatenation pressure

As a result, we succeeded successful optimizing revenues by nan early termination of nan short remaining word contracts, allowing america to use from higher trading prices. We besides commissioned definite assets earlier than expected and negotiated a number of statement pinch electricity-consuming companies, allowing america to optimize our revenues, projects and operating assets.

These actions resulted successful a $15 cardinal summation to discretionary rate flows generated successful 2022, a 9% summation complete 2021. We besides proceed to adhd projects to our pipeline successful nan 4 quarters pinch nan summation of star and upwind projects, totaling 137-megawatt to nan preliminary shape of our pipeline.

Looking ahead, we are successful a very coagulated position to prosecute our maturation pinch adjacent to $500 cardinal successful disposable rate travel and authorizes financing successful nan ratio of indebtedness -- of nett indebtedness to full capitalization of 40%. We besides person a very coagulated pipeline of projects successful improvement and construction, which now stands astatine 5.5 gigawatts, this is 2.5 gigawatts higher and an summation of 81% complete fiscal twelvemonth 2020, nan reference twelvemonth for our 2025 strategical plan.

Before covering marketplace condition, I would for illustration to item our achievements successful nan past 4 years for immoderate cardinal metrics. First, our installed capacity went from 1.9 gigawatt successful 2018 to 3 gigawatt astatine nan extremity of 2022, a 12% CAGR.

As mentioned before, our pipeline of projects accrued importantly and much than doubled successful nan past 4 years. This maturation was achieved while maintaining our indebtedness level almost level astatine $3.3 billion. Our AFFO and FFO per stock grew by CAGR of 30% and 22%, respectively, during this period.

I'm very proud of these results and we'd for illustration to return this opportunity to convey each Boralex labor for their committedness and difficult activity during these years. As you tin see, your efforts really paid off. I won't spell successful each nan specifications of nan market's condition. But successful general, I would opportunity that for each markets successful which we run and developed, favorable programs are being discussed aliases put successful spot akin to nan IRE successful nan U.S.

In Canada, discussions are ongoing astir an finance taxation in installments of up to 30% per overseas finance successful cleanable technologies pinch a attraction connected nett zero technologies, artillery retention solutions and cleanable hydrogen. In France, nan debased to accelerated improvement of renewable power has been reviewed by nan Senate and nan Parliament and should beryllium approved successful nan coming weeks.

This will beryllium followed -- this twelvemonth was nan publication of nan Port Ryerse yearly scheme mounting nan rules and RFP requests for nan coming years. The celebrated PPE. In nan U.K., England focused mostly connected star and caller outlook for onshore upwind farms.

Scotland focused mostly connected onshore upwind power. It has released an onshore upwind argumentation connection astatine nan extremity of 2022 successful which nan Scottish authorities sets connected an offshore upwind capacity target of astatine slightest 20 gigawatt by 2030. This will correspond an further 11 gigawatt of capacity by nan extremity of nan decade, Scotland presently has astir 9 gigawatt of operational onshore wind.

I would now quickly reappraisal nan main variances successful our portfolio of projects and maturation base. The 8-megawatt alteration successful nan early shape was owed to nan summation of caller upwind and star projects totaling 137-megawatt successful Europe. Change to nan expected capacity of 9 upwind projects and six star projects successful Europe for 18-megawatt favorable impact.

These increases were offset by nan progression of 4 upwind and 4 star powerfulness projects successful Europe to nan mid-stage shape totaling 163-megawatt. The 37-megawatt summation successful nan precocious shape resulted from nan progression successful Europe of 3 upwind projects from nan mid to nan precocious stage

In total, our pipeline now comprises task totaling 4.1 gigawatt of upwind and star task and 820-megawatt of retention project. In storage, we submitted our bid for 380 megawatt successful nan Ontario RSP connected February 16.

Let's reappraisal nan alteration to nan gross way now. No task progressed to nan secured stage, but 3 projects from nan secured shape transitioned to nan ready-to-build phase. These projects astatine nan 100-megawatt nett upwind task of Apuiat successful Quebec. The 29-megawatt upwind task Moulin Blanc and nan 21-megawatt upwind task Bois St-Aubert successful France.

These projects totaling 150 megawatt are expected to beryllium commissioned successful 2024. I won't screen successful item nan advancement made successful our 4 strategical directiona arsenic I person already talked astir nan awesome highlights, but you tin find each nan specifications successful nan slides of nan webcast and successful our MD&A.

This completes my part. I will now fto Bruno screen nan financial position successful much item and will beryllium backmost later for nan mobility period. Bruno?

Bruno Guilmette

Thank you, Patrick. Good morning, everyone.

I will commencement pinch a reappraisal of nan advancement made successful ray of our 2025 firm objectives. As mentioned by Patrick, we made bully advancement connected nan installed capacity by surpassing nan 3 gigawatt mark. The EBITDA and reinvestment ratio are progressing according to plan, while we person a beardown AFFO summation of 27% successful 2022. About our CSR strategy, we continued to make bully advancement connected nan environment, societal and governance fronts arsenic presented connected Slide 16.

In 2022, we updated and published our biology mission. We surpassed our 2022 target of women successful guidance positions and accrued nan target for female practice connected nan Board of Directors from 30% to 40%. Currently, women correspond 45% of our Board members.

Finally, we created nan position of Senior Vice President, Enterprise Risk Management and Corporate Social Responsibility, pinch nan extremity of integrating ESG pinch consequence management. For much elaborate information, including information connected CO2 emissions and activity done successful narration to nan ambiance changes and nan TCFD initiative, I induce you to publication our 2022 CSR report, which has been published earlier this morning.

Lastly, connected our firm objectives, our equilibrium expanse remains very coagulated pinch adjacent to $500 cardinal successful disposable rate and authorized financing accommodation to proceed implementing our maturation plan. Our nett indebtedness to full headdress ratio stands astatine 40%, down from 48% past year. 90% of our indebtedness is task indebtedness pinch nary recourse connected Boralex and fixed liking rates.

I will now screen nan financial results for nan 4th starting pinch production. Overall, full upwind accumulation for nan 4th combining Canada and France was successful statement pinch anticipated accumulation and 16% higher than past year.

Total accumulation for nan hydro assemblage was 12% little than anticipated and 21% little than past year. The alteration is chiefly attributable to U.S. Hydro owed to unfavorable upwind conditions. Finally, accumulation from star assets was 3% little than anticipated but 10% higher than nan aforesaid 4th past year.

In summary, full accumulation for nan 4th was only somewhat little astatine 2% than anticipated, but 9% higher than past year. Fourth 4th mixed revenues were up 63% compared to past year, mostly owed to precocious energy prices successful France for which a ample information had to beryllium put speech arsenic a reserve to reimburse revenues supra nan value cap.

Combined EBITDA accrued by 6% successful nan 4th fourth and operating income decreased by $68 cardinal aliases 82% owed to nan nickname of a non-cash plus impairment complaint connected our U.S. star assets, a complaint relating only to summation liking rates successful our yearly depreciation test.

Please statement that nan $12 cardinal summation successful firm expenses is related to summation successful nan workforce, related to nan maturation of nan corp and non-recurring costs successful regards to nan guidance exemplary update.

On a consolidated basis, we person generated $189 cardinal of consolidated nett rate flows related to operating activities compared to $81 cardinal successful nan 4th fourth past year. Cash travel from operations was $141 cardinal successful nan 4th quarter, a $25 cardinal summation complete nan aforesaid 4th past year.

AFFO was $77 million, compared to $58 cardinal successful nan aforesaid 4th past year. The summation comes from nan EBITDA increase. The alteration successful liking paid an early repayment of task indebtedness successful caller quarters. Our financial position is very coagulated pinch our nett indebtedness to full marketplace headdress ratio of 40%.

I would for illustration to concisely screen 1 past constituent earlier nan conclusion. When looking astatine our 4th fourth results, please statement that 3 elements affected immoderate of our financial measures without having a worldly effect connected our EBITDA and rate flows. The first constituent is an impairment of assets for our U.S. star operations, fixed abrupt important summation successful discount complaint erstwhile performing our year-end impairment test. The colony affected our operating income but had nary effect connected our rate flow.

The 2nd constituent was nan announcement of nan period for nan provender successful premium contracts. As expected erstwhile we released our 3rd 4th results, this level was not higher than our statement price, hence we did not person to return further retroactive charges relating to this connected apical of nan 3rd 4th charge. Our prudent attack served america well.

Finally, nan marketplace value headdress of €100 positive 10% of nan quality betwixt trading value and €100 became charismatic successful France astatine twelvemonth end. As expected, we accounted for an operating complaint during nan quarter, which mostly offset revenues generated by nan assets affected by nan cap.

In conclusion, fiscal twelvemonth 2022 and nan 4th fourth were beardown periods successful which we prosecute nan disciplined execution of our plan. We accrued accumulation capacity by 21%, surpassing nan 3 gigawatt mark. We added 137-megawatt to nan preliminary shape of nan task pipeline successful nan 4th quarter.

Our pipeline of projects successful improvement and building now stands astatine 5.5 gigawatt. We generated discretionary rate flows of $167 cardinal for nan year-end December 2022 to 27% summation complete 2021 and we proceed to person a beardown financial position.

Thank you for your attention. We are now fresh to return your questions.

Question-and-Answer Session

Operator

[Operator Instructions] We are now going to proceed pinch our first question. The questions travel from nan statement of David Quezada from Raymond James. Please inquire your question. Your statement is opened.

David Quezada

Thanks. Good greeting everyone. Maybe if I could conscionable commencement successful France and conscionable connected nan taxable of imaginable accelerated permitting timeline. Is location immoderate colour you tin supply connected really that could use nan projects successful your pipeline aliases what nan use could beryllium for you there?

Patrick Decostre

Yes, bully morning, David. The rule has gone done nan Senate and nan Parliament and nan Commission connected January 10. And nan last take will beryllium successful nan adjacent weeks successful nan French process. I cannot springiness a clear opportunity guidance to say, really overmuch lucifer it will accelerate, decidedly France request much renewable and wants to person opportunity little reddish tape. That's nan return and I deliberation nan PPE, nan programmation pluriannuelle de l'énergie power will beryllium an important measurement because it will specify precisely nan gait and nan measurement of nan RFP for nan adjacent year.

So -- but I deliberation what we already spot intelligibly is that section management are much diligent than ever successful France erstwhile we person to accommodate thing connected nan project. So I deliberation -- and this is nan astir important point. It's bully to person a low, but it's important that connected nan ground, it's accelerating and we already spot immoderate awesome for illustration this and we will push difficult to that it impacts nan important task that we person successful our pipeline.

David Quezada

Excellent. Thanks for that, Patrick. And past possibly conscionable 1 much for me. When you look crossed your footprint and possibly specifically, if we could touch connected Limekiln, do you spot immoderate changes to nan fund for immoderate task aliases thing that you had constituent to arsenic being affected by higher costs?

Patrick Decostre

By higher costs. Yes, nan constituent is, you person seen that Limekiln was successful our grows way since, I think, 2020. And truthful we had to accommodate ourselves to different point. We get nan hold agreement, we get larger turbine, bigger rotor agreement.

And truthful we person not taken immoderate two-stretch assumption. So we are -- we person taken our last finance determination and we are very comfortable pinch nan return, which is connected nan precocious broadside of nan 8 to 10-person expected return. So that's nan thing.

And it's nan aforesaid connected nan Apuiat projects successful Quebec. We person been capable to discuss a statement pinch a turbine supplier and pinch nan BOP and its existent costs that we had -- we had room successful to optimize nan task betwixt nan clip opening of 2020 erstwhile we signed nan statement pinch Hydro-Quebec and today. And so, we are besides connected nan precocious broadside of this return frame.

David Quezada

That's a awesome color. Appreciate it. I'll move it over.

Patrick Decostre

Thank you.

Operator

We're now going to proceed pinch our adjacent question. And nan questions travel from nan statement of Rupert Merer from NBC. Please inquire your question. Hello, Rupert, your statement is open.

Stephane Milot

Hi, we tin spell pinch nan adjacent one.

Rupert Merer

I'm sorry astir that. I'm a rookie apparently. Looking astatine your U.S. star pipeline, you took immoderate write-downs successful nan 4th successful New York. And I cognize you bought immoderate opportunities for possibly repricing immoderate of those projects. Can you springiness america immoderate colour connected really that process is evolving?

Bruno Guilmette

Just to mention Rupert, truthful we did not return write-downs successful New York. Write down nan depreciation is only connected our U.S. star acquisition done successful '21 because connected nan yearly test. We are utilizing higher liking rates and that's nan only logic it's not performance-related and solely connected U.S. star acquisition completed successful '21 for California and immoderate different states.

Patrick Decostre

Yes. And connected nan New York project, specifically, we are making bully advancement connected nan costs and tract optimization. We are for illustration nan full manufacture successful chat pinch NYSERDA and I americium assured that this will beryllium affirmative because they will person 1 measurement aliases different return into relationship nan ostentation and nan RFP pinch NYSERDA is on, we person to bid connected April 16 for nan 2022 RFP that has been postponed successful 2023.

But aft opening each nan offer, they will person a clear position of what is simply a adjacent value for a task coming pinch today's costs including IRA and each those things. So astatine that time, I presumably will enactment to thief each nan manufacture to return last finance determination past commencement building.

Stephane Milot

Rupert, this is -- Hi, this is Stephane. Just wanted to adhd connected nan impairment mobility astir -- there's besides different point to see is that because we person a constricted magnitude of assets successful nan U.S. So nan parameter to do nan testing because there's not a batch of assets is rather small.

So that besides triggers for illustration erstwhile you get nan high, for illustration Bruno mentioned, abrupt summation successful liking rates. So it has nary effect connected early gaps we were looking astatine for this business. This is strictly an accounting measure. No rate effect either and if ever, nan rates are going down this accounting complaint could spell down also. Thank you.

Rupert Merer

Okay, great. Thank you. And Bruno, connected your liquidity, you mentioned you person $500 million. Forecasting your maturation retired nan adjacent fewer years, really agelong has your runway now to beryllium capable to money investments earlier you request much equity? And are you still looking astatine M&A, which of people whitethorn shorten that runway somewhat?

Bruno Guilmette

Yes, we're ever -- Rupert, convey you for your question. We're ever looking astatine galore opportunities, whether it is successful Europe and/or nan U.S. arsenic per our strategical plan. So successful nan regions that we've talked astir successful nan past, truthful this is surely a volatile environment, which tin beryllium bully for -- perchance for M&A. Valuations are moving around. So hopefully, it's going to create opportunities.

So putting speech chartless M&A for your mobility connected runway and nan cash. I mean, we judge that surely for this year, we're beautiful good financed. We person a fewer ample projects that are going to statesman building complete nan people of nan year. But that's taken into relationship successful our projection and we'll spot what happens connected nan M&A side.

Rupert Merer

Great. Thanks for nan color. I'll time off it there.

Operator

We are now going to proceed pinch our adjacent question. And nan questions travel from nan statement of Sean Steuart from TD Securities. Please inquire your question.

Sean Steuart

Thank you. Good morning. Just pursuing up connected nan past question, Bruno. Any broader thoughts connected plus recycling opportunities. You timed nan waste down successful France, a twelvemonth agone very well. Is location still beardown liking from backstage buyers capable that you mightiness see further plus sell-downs to bolster nan backing position?

Bruno Guilmette

Thank you, Sean. The -- location is ever bully Interest for nan types of assets that we ain and nan squad that nan group that we person to run and create these assets. So it's really our determination to look astatine wherever we judge we person created worth and wherever we judge that we could stock immoderate of nan early imaginable upside and astatine nan correct value astatine nan correct time.

So we effort to fundamentally look astatine nan portfolio. And erstwhile we spot imaginable for that to happen, I mean, we're going to look astatine nan possibilities successful nan portfolio. Essentially, we want to create value. And past I've joined by I mean, our cardinal financial investors arsenic we've done successful France. So we judge location are different places successful nan portfolio, we could do that, but it's not for nan contiguous future.

Sean Steuart

Okay. Thanks for that detail. And then, Patrick, a mobility for you pinch respect to Quebec. Beyond nan 3 projects pinch power present and Hydro-Quebec, tin you remark connected your longer-term pipeline successful nan province? And I conjecture nan timeline for those projects coming to fruition and if nan turnover astatine nan apical of Hydro-Quebec has immoderate base connected that timeline?

Patrick Decostre

We commencement by nan end, strategical scheme of Hydro-Quebec has not changed by nan alteration astatine nan top. And clearly, nan section of Quebec authorities is very beardown and affirmative connected nan upwind development. Remind you that, Quebec needs to adhd nan 100 terawatt hr earlier 2050, which intends a 50% summation of nan coming production.

Last Tuesday, nan Energy Minister, Pierre Fitzgibbon announced that successful nan coming years, nan capacity -- his volition was to double nan capacity successful Quebec from 4 gigawatt to 8 gigawatt and to quadruple to 16 gigawatt by 2040, 2050.

So it's clear that nan authorities will spot bid Hydro-Quebec to commencement caller RFP successful nan adjacent months. And it's besides clear that connected our pipeline, we person -- from our acquisition of Apuiat task and Seigneurie de Beaupre task and statement speech successful nan past 2 years, we person restarted powerfully to make Greenfield improvement successful Quebec and that we will beryllium fresh to bid successful this RFP.

Sean Steuart

Okay. Thanks very overmuch for that detail. That's each I have.

Patrick Decostre

Thank you, Sean.

Operator

We are now going to proceed pinch our adjacent question. And nan questions travel from nan statement of Mark Jarvi from CIBC. Please inquire your question.

Mark Jarvi

Good morning, everyone. Just coming backmost to nan New York star projects. Following up connected your comments, Patrick, erstwhile you get a revised value of NYSERDA -- really soon tin you move to construction? Are those projects astir -- afloat permitted? And are you adjacent capable connected procurement that you tin make a building approved successful a timely fashion?

Patrick Decostre

What is -- nan squad is moving very difficult to optimize nan existing 200-megawatt project. So we person optimized layout, we person optimized inventory, we person optimize everything we can. At nan aforesaid time, we are moving connected nan improvement and optimization of nan 540-megawatt and we are moving difficult connected bidding caller projects. So we are -- we person a rather clear position of nan costs of building coming and nan velocity of building successful bid to optimize that.

So I think, what I dream is that NYSERDA will do that astatine nan aforesaid time, past nan national authorities will instrumentality nan existent taxation in installments rules, nan IRS rules. And past we tin -- we will beryllium capable to return our determination very quickly.

Bruno Guilmette

Maybe Mark, conscionable to adhd connected that for nan 200-megawatt, we person each authorization to go. So it's really a mobility of getting nan correct economics to start.

Mark Jarvi

Okay. All right. So it's up to your decision. Once you person immoderate value certainty, you guys get to state FID. You tin move beautiful quickly nan construction?

Patrick Decostre

Yes.

Mark Jarvi

Okay. Coming backmost to nan projects pinch Energy present arsenic successful Hydro-Quebec evidently Hydro-Quebec showing benignant of a region connected nan procurement to thinkable readying and siding. Does that alteration astatine each those projects, which person been done connected a bilateral basis? Does that alteration nan timeline astatine each aliases do you still consciousness for illustration those projects to move up successful a timely fashion? And possibly you could update america successful position of wherever you are successful negotiations of a PPA price?

Patrick Decostre

So this task has been afloat negotiated. It's a 400-megawatt project. We are moving difficult to get nan biology authorization and we're moving difficult connected section consultation and everything to beryllium approved. We are besides moving difficult pinch -- successful nan follow-up of APUIAT bid of turbines and BOP, we are moving difficult to optimize costs of nan project.

So nan volition of Hydro-Quebec to motion these 3 statement was specifically to say, correctly to accelerate their -- nan power proviso to them without having to hold for RFP and nan governance. So it's clear that they request power quicklier than 2027 which will beryllium astir apt nan day for nan adjacent RFP to put successful statement for nan adjacent RFP that will come. So nary hold connected this project. The -- Sorry. The captious way is obtaining authorization finally.

Mark Jarvi

And truthful now you deliberation you'll get biology authorization and erstwhile could you move to I guess, last finance determination connected those projects?

Patrick Decostre

Yes. And that's why we are already moving difficult to discuss costs, moving difficult to optimize nan costs because it's a large project. So optimize roads, level everything. It's an important optimization and nan squad did it connected nan first three, 4 phases of Seigneurie de Beaupre project. So we cognize nan place. But nan captious way is really to day nan biology authorization.

Mark Jarvi

And is that expected to beryllium completed by nan extremity of this year?

Patrick Decostre

Yes and no. Yes, if everything goes perfectly well. No, it could beryllium opening of adjacent year, if it's a small spot much difficult. I do not expect that, but we're moving difficult to make our determination this year, but I cannot committedness this to you today.

Mark Jarvi

No. I understood. And past nan past mobility from maine is just, obviously, it's been value caps successful France, powerfulness prices travel down a small bit. I'm conscionable funny to see, wherever nan firm PPA marketplace is now comparative to possibly six months agone aliases 12 months ago. So we've updated you successful position of what pricing mightiness beryllium capable to clear for 10 years aliases longer?

Patrick Decostre

Yes. Its -- PPA marketplace really dangle of nan long of nan PPA. We person typically widen 1 of nan PPA we signed immoderate years agone pinch a institution astatine a value which is complete €100 megawatt hours. So -- but this is simply a three-year extension. If you want to spell to longer-term, I would nan value today, nan speech is complete -- betwixt €80 to €90 megawatt hr for 10 years and this is things we are negotiating presently for specifically caller assets. So that's 1 thing.

And yes, location is simply a batch of request because -- and we person choices because really companies who person a imagination of nan proviso and request of nan powerfulness marketplace successful Europe, they intelligibly understand that nan value will not spell down. And truthful they want to unafraid their energy and they cognize that location is not truthful overmuch projects coming which are capable to waste their energy because they are each contracted.

Mark Jarvi

Okay. Thanks for clip guys.

Operator

We are now going to proceed pinch our adjacent question. And nan questions travel from nan statement of Nelson Ng from RBC Capital Markets. Please inquire your question.

Nelson Ng

Great, thanks. So I conscionable person a fewer speedy questions. So you person -- you evidently person a batch of developments successful France complete nan adjacent fewer years. And I conscionable wanted to clarify, successful position of task costs and inflation, are you seeing costs onshore retired aliases travel down successful nan later years, arsenic you benignant of look to costs retired these projects aliases our task costs aliases ostentation conscionable normalizing aliases is it coming down? Can you conscionable remark on, for illustration if you build thing successful 2022 but conscionable much --

Patrick Decostre

Yes, possibly 1 point is, ostentation successful France. You person 2 things successful a project, you person nan turbine themselves and this is affected by nan world global markets. So presently nan costs of turbine are still really acceptable because nan IRA is not yet successful place. So this will decidedly put a unit connected nan costs of turbine for nan future.

But for nan equilibrium of plant, I don't spot truthful overmuch quality 10 years agone successful France because nan French system is going okay. But it's not going for illustration North America system and nan unit connected nan workforce is not connected work and workforce is not nan same.

The ostentation successful Europe is specifically owed to power costs and not salaries and workforce. So it's wholly different. It's besides I deliberation different business erstwhile you comparison to what hap successful offshore because nan risks that we person taken successful typically contingencies successful our fund are really successful statement pinch what happens.

So we person galore projects that person been put successful work aliases still successful building successful France and we are connected clip and connected fund connected each these project. And this year, we will put successful work 56-megawatt successful France and I do not expect to person a large -- immoderate consequence connected nan fund because contraction are going distant -- going good and it's going nan correct direction.

Nelson Ng

Great news. So conscionable to clarify, nan -- receiving 18 months of merchant powerfulness value erstwhile projects are completed, really acold does that spell successful position of, for illustration if you person projects completed successful 2024. Do they besides get nan 18-month vulnerability aliases upside?

Patrick Decostre

Yes, it's a very bully question. Presently, this 18 months is an objection -- exemption, sorry, connected nan finance debased for 2023, which put a value cap, okay. So if a task is started successful 2022 aliases 2023 and affected by nan value cap, it is nary exempted by nan low. This is what we isolated from six months agone and this is successful nan lieu of December 30. So what it intends is that if location is nary hold of nan value headdress successful 2024 and further, nan exemption will enactment and we stay and we will person this possibility. So that's 1 thing.

And conscionable to return nan opportunity of your mobility connected January 1, we person 163-megawatt which will beryllium successful this 18 months for 2023 and immoderate portion of 2024 six months successful 2024 typically from 90 days 160-megawatt 63 and we will put successful work 12-megawatt successful S1 and 44-megawatt successful this S2 and this will besides use from nan precocious price. So I deliberation this is important because value successful Europe is still and France is still betwixt astir €150 megawatt hour. And value for adjacent year, erstwhile you look to guardant value for 2024, it's quoted €170 megawatt hours.

So nan marketplace is not seeing nan value going down successful 2024, which is normal erstwhile you look to atomic refurbishment successful France, atomic -- important activity and moreover nan state business that North of €50 megawatt hr successful gas.

Nelson Ng

Okay. Thanks for nan color. And conscionable 1 past speedy question. In position of nan secured projects, nan French projects successful nan secured bucket, are those apt -- much apt going into '24 aliases much apt into '25 successful position of nan completion date?

Patrick Decostre

Yes, it dangle project-by-project and it will springiness immoderate of these projects. No, connected each of this project, I'm sorry, we person already nan authorization but authorization are situation successful beforehand of nan court. We won each our proceedings during nan past five, 10 years, probably. So I'm rather assured and I don't for illustration to opportunity that, but I'm rather assured that we will triumph besides this project. That's why we put them successful this.

And again, nan French courts are alert that they person besides to accelerate their activity connected authorizing upwind aliases star task for -- owed to nan power crisis. Even if they stay independent from nan government, they are not crazy and they understand that it's nan liking of nan nine and friends to accelerate this.

Nelson Ng

Okay. So immoderate of those projects were conscionable benignant of held up successful nan tribunal process?

Patrick Decostre

Yes, it really depends. If they are, spot if -- and I don't person nan day successful mind. So I cannot reply directly, but we tin travel backmost to you, if you want. But if we person nan assemblage successful S1, we will beryllium capable to link successful 2024 and if we person nan assemblage successful S2 astir apt it would spell and gaffe to 2025 but it will not gaffe further than that.

Nelson Ng

Okay. Thanks for that. I'll time off it there.

Operator

We are now going to proceed pinch our adjacent question. And nan questions travel from nan statement of Ben Pham from BMO. Please inquire your question.

Ben Pham

Hi, thanks. Good morning. Wanted to inquire connected your caller U.S. acquisition. Some assets that you picked up successful Texas and surrounding areas. What is your adjacent word and possibly longer word goals pinch that acquisition?

Patrick Decostre

Yes. The first constituent is, it accelerate our vulnerability successful nan U.S. market, for illustration we mentioned successful our strategical plan. It's -- nan very adjacent word it's bully rate flow, a very reasonable valuation. I deliberation we discuss for much than 1 twelvemonth aliases 15 months pinch EDF connected this project. These projects are successful very bully style besides technically. So that's nan near-term goal.

And nan 2nd portion is, we person not commencement and I will not denote that coming that we commencement integrated improvement successful Texas and New Mexico. But it's a beardown marketplace pinch absorbing demographic and request grows. So perchance it could beryllium thing wherever connected nan agelong term. So not today, we would determine to make buildup astir these task aliases proceed to opportunity for illustration to person this exposure.

One thing, which was not portion of nan goal, but which is simply a bully bilateral use of nan task is that we are collaborated pinch Axiom successful this task and Axiom is sometimes aliases galore times competitor to bargain assets. So we person besides speech pinch them to be, say, sometime partner disconnected different M&A and leverage their costs of capital, backstage costs of superior and our operational excellence and skills. So location are different aspects.

And past but not least, we've entered nan U.S. market. When you spell to a taxation equity provider, nan first mobility is, are you astatine 10 gig guy? And truthful coming we are northbound of 1 gig guy. So we commencement having a speech pinch these group erstwhile we had conscionable 200-megawatt successful operation, it was -- we were little absorbing to these people. So I deliberation this is besides an important bilateral benefits of this project.

Ben Pham

Okay, thanks. And tin you punctual maine -- does this -- your targets, I cognize you mentioned diversification had percentages for nan U.S. this transaction, does that get you person aliases is it seems for illustration there's much to spell successful nan U.S.?

Bruno Guilmette

On nan agelong term, arsenic we said successful our strategical scheme is to make nan U.S., our number 1 market. So this is rather a batch of nan rather a measurement to spell still and our maturation to nan U.S. some successful upwind and solar.

Patrick Decostre

Yes, nan target I deliberation for 2030 is 45% of our installed capacity successful nan U.S., but 45% of 10 gigawatts. So it means, we request to quadruple our vulnerability successful nan U.S. successful nan adjacent 8 years and we will activity connected that.

Ben Pham

Okay, sewage it. And past possibly successful France, a batch of changes of value caps and rules aliases whatnot that whitethorn travel up that whitethorn not travel off. But if you conscionable benignant of spot what happened nan past six months aliases truthful pinch pricing. Would you person done what you've done pinch early retirements if you knew what you knew coming connected really nan value caps materialized?

Patrick Decostre

Yes, sure. It's -- location is 2 things. Yes, nan reply is yes. And if I knew nan value headdress astatine that time, we have, possibly successful nan statement we signed pinch nan different counterparties, we could person do thing an improvement, but we're still very happy pinch nan business because nan project, nan 326-megawatt, which were -- connected which we nonstop astatine early termination, nan mean value was €95 a megawatt hour. Okay. €95 megawatt hr owed to ostentation and because its aged assets.

In Q4, we were trading this energy northbound of €500 a megawatt hour. It intends that aft value cap, 10% of 400 positive 100 intends a €140 megawatt hour, which is still a very bully value contempt each my frustration. And for this year, it's North of €120 aft value headdress nan blended value for this 326-megawatt.

So I'm still happy pinch what I did and what nan squad did. It could person been really different. And yes, that's -- I deliberation it shows nan agility of our squad and each we were prepared to different script because we commencement to person a trading aggregating team. I commencement that pinch a azygous feline and I deliberation successful 2017 and we were prepared to do this large move, which will create -- which has created a batch of value, which will create a batch of worth for this twelvemonth and adjacent year.

And again, I deliberation it was -- question, we don't cognize coming if location will beryllium a value headdress aliases not successful 2024 and further. So that's besides thing which is interesting. And besides different point that we person done is we person accelerate by astir 5 months Moulins Du Lohan task 65-megawatt. And by two, 3 months I deliberation Mont de Bézard project, which is 25-megawatt. So connected this part, we person been besides agile to beryllium exposed to nan 18 months, which isn't different things, but it shows really overmuch we are connected nan bull connected these things.

Ben Pham

Okay, that's great. Thank you.

Patrick Decostre

Thank you.

Operator

We are now going to proceed pinch our adjacent question. And nan questions travel from nan statement of Andrew Kuske from Credit Suisse. Please inquire your question.

Andrew Kuske

Thanks, bully morning. I conjecture nan mobility is for Patrick. Really wherever are you seeing nan top unit points successful processing projects, is it connected nan OEM side, forgetting instrumentality and nan pricing of that instrumentality EPC and institution is really building it aliases is it connected nan regulatory broadside pinch onshore approvals and transmission interconnections, I guess, what are your biggest concerns astatine this point?

Patrick Decostre

I deliberation connected nan very - I will answer, Stephane. On nan very short word - he wants to return my job.

Stephane Milot

No, I was conscionable saying that it's a different marketplace to --

Patrick Decostre

I deliberation connected nan short word connected nan very short term, what is important for existing task is nan mobility of nan costs and it's moving connected that. And I besides already commented connected this, I deliberation we person room of optimization and we person taken spot its nett -- it's 100-megawatt Apuiat, but it's 200-megawatt last finance determination past quarter. We person taken Limekiln determination and we're building different 56-megawatt successful France.

So I'm rather assured we are connected nan correct side. We person to leverage besides nan 1.2-gigawatt task we person successful Quebec to discuss nan costs. So very short-term to costs is something. I deliberation connected nan mean word and this dangle from 1 marketplace to nan different is nan grid connection. Transmission and this will impact each marketplace erstwhile they aliases another, nan separator connected nan grid and connected nan transmission strategy successful almost each marketplace successful nan world aliases astatine slightest nan Western world are their limits.

So nan authorities has to put tons of money connected this. And erstwhile I opportunity tons of money, it's astir apt billions. But it's nan only measurement to make nan power transition, truthful it doesn't trust connected Boralex. What trust connected our broadside is to find a spot wherever location is still capacity to link task aliases to find nan spot and lobby to person caller capacity location and beryllium fresh to link a task successful 2027, 2028 wherever nan capacity will beryllium successful astatine that time.

Andrew Kuske

Okay, I admit that. And past nan 2nd question, Patrick, you mentioned earlier connected conscionable nan value of having a definite standard to woody pinch definite players connected nan taxation equity marketplace from nan counterparty ground and you've had very definitive megawatt targets successful nan marketplace of what do you want to do execute and you're good underway pinch that. When do you expect that megawatt target shifting and possibly return targets, whether it'd beryllium ROE, Rocky, immoderate different superior metric? And possibly this mobility for you, Patrick, and besides for Bruno.

Patrick Decostre

Andrew, could you repetition nan question? When do we expect?

Andrew Kuske

To modulation from megawatt targets to possibly return targets for illustration hitting a target return connected your full task portfolio and being much definitive astir nan return expectations.

Patrick Decostre

Well, we person successful a measurement return targets because we're putting not only megawatt targets connected our 2025 plan, but besides AFFO. So to us, it is nan return target. It's firstly a return target. I mean we want to do, arsenic we've said successful nan past, we won't do megawatt conscionable to do megawatt. We want to make judge that we proceed our disciplined attack and increasing profitably.

So I know, I mean, we've talked astir our return target by projects, which is -- which continues to beryllium 8% to 10% connected a levered basis. And clearly, we're seeing that we're competitive, but successful a correct measurement we triumph immoderate projects and we suffer immoderate different projects. So we proceed to beryllium successful nan market. But from a different types of target, I mean, for now we judge that we're focused connected nan correct numbers.

Yes. And conscionable possibly a remark and circumstantial which is important, and I cognize that we discussed that pinch investors. Not judge that we discussed that pinch Analyst. But nan 50% of nan short-term incentives of each worker successful Boralex is to hit nan highest free rate travel per share, that has been achieved successful nan past.

So that's what we person done for nan past 20 years, I think. It's to spell successful nan correct direction. So it gives a batch of subject to america erstwhile it's clip to return finance decision. We're not looking to megawatt. We're not looking to EBITDA. We're looking to FFO and AFFO per stock and this is connected nan what we are incentivized. So I deliberation it gives america a batch of subject to nan team.

Andrew Kuske

That's great. Appreciate nan color. Thank you.

Patrick Decostre

Thank you.

Operator

We are now going to return our adjacent question. And nan questions travel from nan statement of Naji Baydoun from IA Capital Markets. Please inquire your question.

Naji Baydoun

Hi, bully morning. Just wanted to inquire a fewer questions connected Limekiln. So I deliberation you signed nan turbine agreements already and projects expected to beryllium commissioned sometime precocious adjacent year. Can you conscionable springiness america an update connected nan timing to motion and announced a firm PPA and get nan financing completed?

Patrick Decostre

Yes. Next 4th is what we are -- that's our target to motion those we request to opportunity motion some astatine nan aforesaid clip because it's important to be, say, back-to-back connected nan speech of these 2 contracts. So that's what we are planning.

Naji Baydoun

Okay. That's great. And conscionable on, you mentioned Limekiln and Apuiat received 2 different projects successful different markets. But those would beryllium benignant of astatine nan higher extremity of your return targets, wherever do you spot and what markets coming do you besides spot nan opportunities to benignant of get amended returns? Is it much connected bilaterally negotiated projects successful Quebec, is it much connected firm PPAs successful France? Just wondering if you tin remark connected wherever benignant of, you spot nan champion connected integrated maturation today?

Patrick Decostre

What I tin show you is that we person this list, but I -- since we person a counterparty nether nan broadside I would not, sorry, remark connected wherever it is. I deliberation we're really, say, each nan task that we do are we do it pinch nan aforesaid discipline. And yes -- and it's excessively delicate information. Sorry.

Naji Baydoun

Okay. So conscionable moreover directionally what types of markets aliases regions tin supply immoderate much color?

Bruno Guilmette

We said successful nan past, I mean nan proviso and request successful France, I mean it still offers bully imaginable because it's difficult to create a task successful France. So we've said successful nan past that we tin still bask bully returns. So it's an important marketplace for america and it's not -- it's conscionable a mobility of proviso and demand. And I mean there's -- we're surely looking to different regions and different types of opportunities for illustration that.

Naji Baydoun

Okay. Okay, sewage it. And conscionable connected that past note, you mentioned still being progressive connected M&A. The attraction though successful nan short word much and much U.S. standard aliases is it caller European markets?

Bruno Guilmette

Essentially what we're looking is, nan U.S. is surely a marketplace we are looking, because of nan size of transactions and it dangle of nan procreation of AFFO because I don't want to do -- we for illustration to do opportunity 1 aliases 2 transaction and not 4 aliases five. So that's 1 thing. So nan U.S. is absorbing connected this side.

Typically, France is not -- nan marketplace wherever we are already for illustration France and Quebec and Ontario is not nan things wherever we are targeting and actively looking to that. There could beryllium immoderate diversification successful Europe wrong strategical plan, but it really dangle of -- what is besides really important, it's not -- it's to really intelligibly understand nan marketplace if we are entering a caller market. So that's besides an important criteria connected my broadside to spell for immoderate M&A transaction.

Naji Baydoun

Okay. That's very helpful. Thank you.

Patrick Decostre

Thank you.

Operator

We are now going to return our past question. And nan questions travel from nan statement of Nicholas Boychuk from Cormark Securities. Please spell ahead.

Nicholas Boychuk

Thank you. Good morning. Just quickly travel backmost to nan French powerfulness move correct now. I conscionable want to understand, like, I person this correct, if you're trading powerfulness connected nan merchant marketplace astatine €500 per megawatt hour, do you instantly person that revenue? And past you administer a 90% of €400 backmost to nan regulator. I'm conscionable trying to understand nan system down that.

Patrick Decostre

Yes, nan measurement nan value headdress is functioning successful France is that yes, we get nan value from nan counterpart. Counterpart could beryllium inferior PPA for illustration we person aliases trading to nan market. And past we person to make nan calculation of, we person benignant of, we return retired nan €100 past we cipher nan quality betwixt nan €100 and nan value astatine which we are trading nan electricity. We return 10% of that.

We tin support that and 90% we springiness it so done -- it's collected done an existing taxation successful France, which is called nan added worth tax, which is an existing 1 and it's conscionable different portion of this stacks because it's temporary. So that's nan logic why it is successful our turnover. But it's already deducted from our EBITDA.

Nicholas Boychuk

Yes. Okay.

Bruno Guilmette

And it goes into accounts payable.

Nicholas Boychuk

Okay, perfect. That makes sense. Thanks. And conscionable very quickly connected nan Ontario artillery power retention opportunities. Is location immoderate update connected nan 600-megawatt that we did?

Patrick Decostre

Yes. We did 380 connected nan February 16, which was nan expedite RFP. There would beryllium different RFP. I don't cognize if we knew already precisely nan timeframe but location would beryllium different one. We person been capable to suffice ourselves to this RFP.

So we bid nan astir awesome task that we person location was immoderate -- because location is simply a value constituent and location is immoderate non-price points for illustration First Nations, support municipal, support, places, nan spot of nan strategy itself. So we make our information and this non-price points are creating a discount connected nan value -- for nan value merit order. So we measure and bid 2 task successful nan process.

But to your question, we are still pursuing nan improvement of a larger portfolio successful Ontario for nan adjacent RFP, because nan request powerfulness not power powerfulness is 2.5 gigawatts from nan Ontario strategy and they request that very quickly. So it's an absorbing opportunity for us.

Nicholas Boychuk

Okay. Thank you for nan color.

Nicholas Boychuk

Thank you.

Operator

We person nary further questions astatine this time. I'll manus backmost nan convention to you for closing remarks.

Stephane Milot

Well, acknowledgment everyone for your attention. If you person immoderate further questions, please telephone maine astatine 514-213-1045. I'll make judge we quickly reply your questions. So our adjacent convention telephone to denote first 4th results will beryllium connected Wednesday, May 10 astatine 10:00 AM. And our -- it will beryllium followed by our Annual General Meeting, which will beryllium held nan aforesaid time astatine 11:00 AM. So thanks, everyone, person a bully day. Thank you.

Operator

This concludes today's convention call. Thank you for participating. You whitethorn now disconnect your lines. Thank you.