Boralex Q2 2024 Earnings Call Transcript

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Provided by Quartr
August 14, 2024

There are 9 speakers on the call.

Operator

Good morning, ladies and gentlemen, and welcome to the Boralex Leggone Quarter of 2024 Financial Results Conference Call. Note that all lines are in listen only mode. Following the presentation, we will conduct a question and answer session in which financial analysts, shareholders and investors will be invited to ask their questions Please also note that the conference call is being recorded. For webcast participants, you can also ask questions during the conference, but they will be answered by e mail after the call. Finally, media representatives are invited to contact Camilla Vontier, Adviser, Public Affairs and External Communications.

Operator

Her contact information is provided at the end of the quarterly press release. I will now turn the conference over to Stephane Milo, Vice President, Investor Relations for Boralex. Please go ahead.

Speaker 1

Thank you, operator. Good morning, everyone. Welcome to Boralex 2nd quarter results conference call. So joining me today on the call are Patrick Decoste, our President and Chief Executive Officer Bruno Gilmourt, our Executive Vice President and Chief Financial Officer and other members of our management and finance team. Mr.

Speaker 1

Lacasse will begin with comments about market conditions and the highlights of the quarter. Afterwards, Mr. Guillemette will carry on with financial highlights and then we will be available to answer your questions. As you know, during this call, we will discuss historical as well as forward looking information. When talking about the future, there are a variety of risk factors that have been listed in our different filings with securities regulators, which can materially change our estimated results.

Speaker 1

These documents are all available for consultation at cedarplus. Ca. In our webcast presentation document, the disclosed results are presented both on a consolidated basis and on a combined basis. When talking about the results, we generally refer to combined numbers and when referring to cash flow and balance sheet, we generally refer to consolidated numbers. Please note that the combine is a non GAAP financial measure and does not have standardized meaning under IFRS.

Speaker 1

Accordingly, combined may not be comparable to similarly named measures used by other companies. For more details, see the non IFRS and other financial measures section in the MD and A. So the press release, the MD and A, the consolidated financial statements and a copy of today's presentation are all posted on the Boralex website at boralex.com under the Investors section. If you wish to receive a copy of these documents, please contact me directly. Mr.

Speaker 1

Lekas will now start with his comments. So please go ahead, Parekh.

Speaker 2

Thank you, Stephane, and good morning, everyone. It's a pleasure for me to present our results and achievements for the Q2 and first half of twenty twenty four. I'm very proud of the work of our team have done since the start of the year. During the first half, we increased our EBITDA by 11%, our operating income by 21% and our net earnings by 41%. We have 8 51 Megawatt of project in secured ready to build and construction phases that are progressing as planned.

Speaker 2

Turbines are being installed in our project Aapwit in Quebec and Lion King in Scotland, which are getting closer to their expected commissioning date scheduled for the end of the year. I would also like to point out, we started to record accounts receivable for the investment tax credit related to the Aput project based on the qualifying property as at the end of the quarter. Bruno will elaborate on this later. Regarding Limkin, we also closed the financing of the project during the quarter as our first financing in the UK. In the next few weeks, we will start the construction of the Agersville and Tilbury battery project in Ontario.

Speaker 2

These two projects are expected to be commissioned in 2025. Our Deneige project Sud project is also progressing well with commissioning expected in 2026. In the near term, our teams have been working on the recent submissions of solar project under the NYSERDA request for proposal in New York State and of wind project under the AR6 allocation round 6 request for proposal in the UK. As you can see, a lot has been accomplished so far this year and there is more to come. Going forward going back to the quarterly results, production was lower than expected due to unfavorable weather conditions and the increase in curtailments in France, mainly due to negative market electricity prices resulting from an unusually strong imbalance between supply and demand in May June.

Speaker 2

Nevertheless, our business performed well, generating a combined EBITDA of $152,000,000 up $9,000,000 and AFFO of $17,000,000 up $13,000,000 compared to the Q2 of 2023. The impact of the lower production was offset by the positive impact of our strategy to optimize electricity selling prices and the contribution of commissioning in France. Regarding market conditions, the demand for renewable energy in our markets remain high, creating a positive environment for the operation and the development of our activities. In Canada, the clean energy Investment Tax Credit received Royal Assent and was enacted last June. This will have very positive impact on our project in Quebec and in Ontario.

Speaker 2

Both markets also represent strong growth potential with a goal by Hydro Quebec to increase production capacity in Quebec by 10 gigawatt and the upcoming RFP plan for Ontario. We are very well positioned with a strong competitive edge in both of this market. In the United States, the federal government is concerned about the increase of in Chinese production of green product and is therefore imposing tariffs on important green technologies, including solar panels to protect U. S. Industries.

Speaker 2

The market remains highly promising and we continue to develop and bid our project. In Europe, the election of the Labour Party in the UK is very promising considering the ambition of the new government for accelerating the development of renewable energy. Our goal is to accelerate our development in this market. Finally, in France, we are still waiting for a new government following the dissolution of the assembly in June. In the meantime, we continue to develop our project for upcoming request for proposal and in light of strong demand from corporation for corporate PPA.

Speaker 2

I will now rapidly cover the main variances in our portfolio of project and gross pass. The change in the pipeline was mainly due to the addition of solar and wind project in Europe in early stage. Changes to the expected of wind and solar project in Europe and North America transition of solar and wind project through the pipeline to the mid and advanced stages in Europe. In total, our pipeline of early, mid and advanced stages project now consists of project totaling nearly 6 gigawatts of wind, solar and storage project. In the Q2, the gross path represents a capacity of 8 51 Megawatt, down 34 Megawatt compared to previous quarter following the commissioning of 21 Megawatt Wind Project and a 13 Megawatt Solar Project in France.

Speaker 2

I won't go in detail through the progress made in our growth and the diversification strategic direction as I have already talked about the major highlights. On the customer strategic direction, we signed a 3 year PPA with StatCraft in the UK for the Lime Chem project to secure pricing on the portion of the wind farm production before the start of its 15 year CFD. We also continue to have advanced discussion with different corporations in France as the demand for renewable energy contracted at attractive price remain high. This completes my part. I will now let Bruno cover the financial portion in more detail and we'll be back later for the question period.

Speaker 2

Bruno?

Speaker 3

Thank you, Patrick. Good morning, everyone. I will start with a review of the progress made in light of our 2025 corporate objectives. Our balance sheet is solid with $621,000,000 in available cash resources and authorized financing, up $46,000,000 from the previous quarter. In addition, dollars 21,000,000 are accounted for in trade and other receivable, representing nearly 1 third of the investment tax credit to be received for the Apriot project construction project in Quebec.

Speaker 3

We are also in negotiation with financial institutions to pre finance these credits. From a cash flow perspective, we should therefore receive cash from financing when this is finalized and reimburse this financing when we receive the payment of credits from the government normally about 12 to 18 months after commissioning. Please note that from a P and L point of view on a combined basis, these credits will be amortized over the time of the contract starting from the date of commissioning and presented as other revenues in combined. Total debt remains stable in the Q2 of 2024 with project debt now representing 89% of the total. The reinvestment ratio is in line with our target.

Speaker 3

Lastly, on our corporate objectives, we continue to make good progress on our CSR strategy as presented in our webcast presentation. We improved our position among the best Canadian corporate citizens in the Corporate Knights ranking climbing from the 21st to 15th position. We also raised our ESG corporate rating from the Institutional Shareholder Services Group of Companies, ISS ESG from a B- to a B plus with prime status. For more detailed information, including data on CO2 emissions and work done in relation to climate change and the TCFD initiatives, I invite you to read our latest CSR report, which was published in February 2024. I will now cover the financial results for the Q2 starting with production.

Speaker 3

In North America, total production on a combined basis for the quarter was 2% higher than last year, but 7% lower than anticipated. Production for the hydro sector was 4% lower than last year and 9% lower than anticipated due to unfavorable weather conditions in Canada. Production from solar assets was 8% lower than the same quarter last year and 25% lower than anticipated, mainly due to curtailment requests in California. In Europe, total production was 2% lower than last year and 12% lower than anticipated, attributable to unfavorable weather conditions and the increase in curtailments in France. Overall, total production for the quarter was 1% higher than last year, but 8% lower than anticipated.

Speaker 3

The quarter combined revenues were down 12% compared to last year, mostly due to lower prices in France. As mentioned by Patrick, we continue to make good progress on the EBITDA and AFFO numbers. Our financial position remains very solid with a net debt to total market capital ratio of 42%. In conclusion, it's a good Q2 for 2024 as we continue the disciplined execution of our strategic plan, delivering on results and numbers. We increased our EBITDA and AFFO compared to 2023.

Speaker 3

We further increased our financial flexibility resulting in a solid financial position. And we continue to deliver on our 4 strategic orientations. Thank you for your attention. We are now ready to take your questions.

Operator

Thank you. We are now going to proceed with our first question. Questions come from the line of Nicolas Bujuk from Cormark Securities. Please ask your question.

Speaker 4

Thanks. Good morning, guys. You mentioned that you're going to be looking to accelerate development of projects in the UK. Can you just expand a little bit on what your expectations are for this market over the coming years?

Speaker 2

Yes. Good morning, Nick. Essentially, with the new government in the 1st few days of them taking office, they lift the ban on the wind project in England, which was there since almost 10 years, I think. So this has opened lots of potential project in England, first point. The second point, the increase significantly the allocation of the budget for the pot of budget dedicated to onshore wind.

Speaker 2

So this increase the likelihood of a better price, a clearing price for the AR6. So this is two signals. And last week, Rachel Reid, the Chancellor, was in Toronto and I was there and she just confirmed they will accelerate planning consent for generation onshore and offshore and also for grid connection and do whatever they can to accelerate the investment in the grid. So I think this is all different possibility of acceleration and I think it's a great news and we are very exciting. And since we have, I just mentioned, finalized the first financing, finalized the first contract with Statkraft plus the CFD we obtained 1 year ago in AR5, I think we're very well positioned to do more of the same in the UK in the next years.

Speaker 4

Okay. And that's good color.

Speaker 2

Can you comment on in

Speaker 4

synergy and their resources? What more would you have to add to that team in order to really take advantage of this opportunity? And if you can comment on that the size of the pipeline,

Speaker 2

Stephen? Yes. Someone of my exec team is now dedicated to the UK and she's working presently from Montreal and working with the team there. We have people also coming from the French team and putting more resource there. So that's we have also higher different people in the UK from the outside.

Speaker 2

And we are also chasing potential M and A and of fully consented project or project in development because I think it's the right time to be in the UK and I think with the team we have there and the rest of the corporation bringing support to them, that's a great opportunity.

Speaker 4

Okay. Excellent. Thanks so much. Thank you.

Operator

Thank you. We are now going to proceed with our next question. The questions come from the line of Mark Jarvi from CIBC. Please ask your

Speaker 5

Just following up on the conversation on the U. K. Are you able to share how many projects you submitted and what types of projects you're submitting in the UK right now?

Speaker 2

Yes. We have hi, Mark. We have submitted 2 projects, which are we are already in our pipeline for aggregated power of 115 Megawatt. We have a very disciplined approach of the bid because we will have other possibility next year and the year after to bid this project in the following round. And this will not delay them since there is some grid time of construction.

Speaker 2

We know when these projects will be connected, but we have no issue of delaying if we win them next year. But and as I mentioned, the budget, it's a little bit different than last year. Last year, it was there was only one part of budget for project and offshore was not in. So there is different part for onshore and offshore, but the onshore part has been increased significantly by the government. So the clearing price should be higher than what we could have expected in June.

Speaker 2

So that's also a good news.

Speaker 5

Just following up on the expectations of higher claim price. How would you say return potential for returns are squaring up in UK versus the other markets you're focused on? Is it comparable, better, maybe maybe you look at that?

Speaker 2

They are better than what we can get in France presently and project are larger. 2 project for 115 megawatts, it's a significant project as you understand compared to France, I mean. And what I see also is that with the mechanism of being able to choose the window to start typically on Lion King, we will start the CFD beginning of 'twenty eight, but we have this merchant node, which is contracted at a very interesting price pay as produced contract with Statgraf we can benefit from a little bit like the 18 months in France, but in this case it would be 36 months contracted pay as produced with a high price today. So this is a good optimization and we have been the team of Bruno has been able to negotiate a very attractive financing for that taking into account these 18 years of generation.

Speaker 5

Okay. And then coming back to investment tax credit in Canada, you mentioned after it. What about the other projects, the Ontario battery projects, the other wind projects in Quebec to come? Do you have a sense of what percentage of the CapEx you'll be able to receive? Is there anything that you have to give back to the counterparty?

Speaker 5

And are you able to quantify roughly what you think the total net proceeds from tax credits would be to Boralex?

Speaker 3

Generally speaking, Mark, we'll have I'm not going to give an exact number right now, but certainly a few 100,000,000 of overall in the projects that we're building that you're aware of. So that includes Aperit, Akerageville, Tilbury, Denaes and am I missing one? No, I think that's it. And the future, Danaesh. The key element is for the Apria, Duygusville, especially and Deneige.

Speaker 3

When we started negotiations and discussions with the offtaker, we did not and when we bid on Aggersville, we did not take into account the ITC in our returns. So that's upside on the base case of these projects. In the future, we expect that each sort of counterparty in the discussion and the suppliers and so on will all take into account the ITC. So we get upside from these early projects where the final project law was not enacted. And therefore, there was risk in the fact that we did not take into account the ITC.

Speaker 3

So we did not take the risk of the ITC not being implemented. So it represents an upside, given that it's now been enacted in June.

Speaker 5

And then if you look at something like

Speaker 2

Yes, go ahead.

Speaker 5

I was going to say something like Tilbury and Oxford, which you probably had some clarity that the ITC would be coming through. Is there like a partial recovery of the ITC with some of the being handed back to the counterparty? I appreciate Hagerfield was more advanced and you probably keep all that. Just wondering about that the subsequent projects in Ontario and even the wind projects where you secured RFP 1 in the RFP most recently?

Speaker 3

We get the credit for the eligible expenses. So that's not the question is whether in the different contracts and that will continue to evolve, But whether we have to give back a portion to the utility for example or whether the suppliers will adjust their pricing accordingly, which we've seen in the U. S, for example. So that's really what I was saying about the future projects where we do get the credit, but eventually it might be more shared amongst the different players in the chain.

Speaker 5

When do you think you'd have clarity on those projects in terms of the sharing split?

Speaker 3

Well, when we signed when we finally signed the different contracts, so it will keep evolving. So on Tilbury, we took into account when we priced. So obviously, we gave a little bit of it in the pricing, but we do get the credit.

Speaker 5

Okay. All right. I'll leave it there today. Thank you.

Speaker 3

I'm not sure if I'm clear, Mark, is that No,

Speaker 2

just to be very clear, on this project, we are not sharing the credit after the contracts are signed and the contracts are signed already. So that was and it was not an assumption when we did except on Tilbury because we have decided at that time to be a little bit more aggressive in terms of risk. We have been right, but and these 2 project also have very good news in terms of CapEx themselves, battery and BOP compared to the business plan. So they are already good return expected return today.

Speaker 5

Understood. Yes. No, that makes sense. Thank you.

Speaker 3

Thank you.

Operator

We are now going to proceed with our next question. The questions come from the line of Sean Steuart from TD Cowen. Please ask your question.

Speaker 4

Thank you. Good morning. A couple of questions. With respect to the progress on optimizing the selling prices in France, can you give us a sense of any expected incremental progress on this front over the next few quarters? Or has most of those gains been crystallized already?

Speaker 2

Yes. Essentially, we have a strategy to fix the price with the offtaker. There is when we typically we have 2 streams of projects under this. We have the early terminated contract of that we early terminate in the fall of 2022 and we signed a contract for all these projects with expo and we have fixed as much as possible the price at that time for the years, but also 202526 when it was possible. For the 18 months, merchant knows, we have done that in Q1 last year for the remaining period of the 18 months and the 18 months will be finished by the end of this year.

Speaker 2

The first group of projects are subject to the price gap. As you know, the second group of projects are not are exempt of the price gap. So going forward, what we're doing, we're doing exactly the same. We're continuing to fix and define in advance when we think it's opportunistically interesting. The price of the electricity that will be sold to Axpo and we have a clear policy of doing that.

Speaker 2

Not to sign too much and not we have a path. Example, 3 years in advance, we want to have 25% fixed. 2 years in advance, we want to have 50% fixed and 1 year in advance, we want to have at least 75% fixed. And we are exactly following this track to be sure we are not overexposed and we are not doing something which is erratic.

Speaker 3

Sean? Yes.

Speaker 1

Just additional comment on that to show you some kind of trend. Like in Q1 of this year, we had a positive variance of $15,000,000 at the EBITDA level coming from this strategy. Q2 is $11,000,000 and Q3 going forward should be going with a lower variances because just as the fact that we fixed price gradually over time and this price was coming down. So the effect will be still good in coming quarters, but not as strong as what we've seen in Q1 and Q2 of this year.

Speaker 2

I don't

Speaker 1

know if it helps you in terms

Speaker 4

of That's great. Thanks, Stephane.

Speaker 2

And also, we as I mentioned, again, we try to be to avoid to be exposed to the spot market because if you look to the last quarter, the wholesale market price average in France was €31 a megawatt hour, so it was very low. But if you want to contract end of this year or next year, the forward product are still around €90 a megawatt hour. So if you have a smart strategy not to be exposed day ahead or week ahead when you know the generation, the wind and the status of everything, you have better opportunity to reach a good price and this is also what we do.

Speaker 4

That's great. Thanks for that. The second question for Bruno, you referenced the bills of exchange is helping bolster your liquidity position this quarter. I'm just wondering if you can explain the terms for that source versus extra borrowing capacity against your revolvers, maybe a bit more context on that liquidity lever for the company?

Speaker 3

Yes. I would I guess the example I would use is sort of trade financing. So it's recorded as a short term, but it's a facility that's a separate facility with a French bank, which helps us clearly finance this type of equipment. So it's in addition to our other sources of financing. It's not a restriction on other financing.

Speaker 3

It's just an addition.

Speaker 4

Okay. Thanks for that Bruno. That's all I have. Thanks.

Speaker 2

Thank you, Sean.

Speaker 1

Thank you.

Operator

We are now going to proceed with our next question. The questions come from the line of Rupat Mehra from NBF. Please ask your question.

Speaker 6

Hi, good morning, everyone. Just to follow-up on the RFP activity, I believe you had some bids into New York as well. Can you give us some color on the scale of that opportunity with this round of RFPs? And any updates you can give on your strategy going into this round?

Speaker 2

Yes. Good morning, Rupert. Actually, we bid 3 project for to NYSERDA for an aggregate power of 5.90 Megawatt. So it's larger project than what we bid in the previous RFPs. And this is clearly where we are going because we think it's the best way to have a better levelized cost of energy and be able to bid with a good return at the better price for NYSERDA.

Speaker 2

So that's where we are. As you know, there is no news from the previous RFP of the winners and in between there was all this question of Chinese product and tariff on Chinese imported panel. So we have taken everything of that into account. And there was also a good news on one side, which is the IRA implementation and the incentive for domestic content. So we have worked a lot and the team has worked a lot on specifically the panel and also the BOP evaluation to be at a good cost.

Speaker 2

So that's where we are and we will see what NYSERDA will decide to select with the project Povid.

Speaker 6

So your previous rounds in New York, I believe you had some large projects. How much overlap is there between this $590,000,000 and the previous portfolios that you bid and how much of it would be new?

Speaker 2

There is just one project, which is the smallest of this round that we bid, which was the largest of the previous round that we did. I don't want to give you more information than that, but just to show you that the overlap is just on one of the 3 projects and it was it's just it's really a strategy to be able to bid a better price.

Speaker 6

Right. Very good. And then secondly, we can talk a little about curtailments you saw in the last quarter. I think you saw some in France and some on your solar, I imagine California. How are you thinking about the curtailments?

Speaker 6

Are there opportunities to install batteries or look at storage alongside any of your systems? Or do you think that others will take care of that for you in the future? How do you see that evolving?

Speaker 2

Essentially, the cause of the curtailment are quite different. In France, it's essentially due to the fact that there is a very, very good hydro generation. If you look to French hydro generation, I think it's the highest since probably the last 6 or 7 years. It's really high. And the nuclear is there, is back too.

Speaker 2

So and the demand was low. So we experienced twice just in the quarter, we experienced twice the number of negative price of 23 essentially in Q2. So it's a little bit going down in July, but it's still there. But I think it's not I'm not sure it will last in France because it's really depend on hydrology of this year and the demand will go up and so that's one thing. So I'm not convinced that an investment is the right solution for us.

Speaker 2

The right solution is to sign the right contract like we are doing, pay as produced and get compensation and on many of the contract mechanism that we have CR17, the contract 1 in previous RFP with we see there was the Cres in France and the utility PPE that we have with Daxko, there is a compensation. On the California situation, it's different. It's just one contract and we have a different interpretation of the contract by between us and the offtaker. And we will enforce the contract and to receive the proper payment and the team is working on this with the off taker presently. So it's a little bit different situation.

Speaker 6

All right, very good.

Speaker 3

How much have you We've recorded the revenues for the French contracts that Patrick mentioned, which are offering compensation, but we have not recorded revenues for the California situation.

Speaker 6

Perfect. So the curtailment in France is in revenue, but not in production. Is that right?

Speaker 2

It's under production, but the compensation is there.

Speaker 4

It's not

Speaker 1

of the compensation. Yes.

Speaker 6

Very good. Well, thank you very much. I'll leave it there.

Speaker 3

Thank you.

Speaker 4

Thank you.

Operator

We are now going to proceed with our next question. The questions come from the line of Benjamin Pham from BMO. Please ask your question.

Speaker 7

Hi, thanks. Good morning. Can you expand on your comments around looking at acquisitions? Is there maybe some color on ideal size, technology, strategic priorities and just what do you think fits the best for Boralex today?

Speaker 3

Well, certainly, we continue to look carefully at the acquisition opportunities. Our teams are active both in looking at good opportunities in both North America and potentially in Europe. Strategically, we keep focusing on the same markets, especially I'd say a bit even more on the UK and U. S. Markets, but we want to find something that's strategic, sizable and where we can add value.

Speaker 3

So it's not dry assets just to but it's good operating assets where we can add value as the Boralex team and also potentially with a team with development assets that we would not pay too much for. So ideally, it's sort of a package. Strategically, as I said, a couple of markets that where we have more needs because we're growing a bit faster in the U. S. And the UK.

Speaker 7

And I know you mentioned also acquisitions of potential just development projects. Could you comment on is there increased willingness to pay more for development now than you have in the past?

Speaker 3

Well, there's been probably a peak a few years ago already and probably a trough more recently down. So likely we're getting back a little bit in terms of value, which is also good for us. But not I think not the extent of the excitement we've seen and not paying too much in the past. So I'd say we're still in a comfortable zone in terms of valuation where we would look at acquisitions, we feel there's still good value to be found and in part to your question in part in development pipeline valuation.

Speaker 7

Okay. And maybe just a cleanup question, the reference to the Canadian ITC projects that were grandfathered. Are you effectively since you financed these projects eightytwenty, aren't you effectively getting your equity back and more just the way that you structure? Am I thinking

Speaker 2

about it

Speaker 7

definitely or It

Speaker 3

certainly reduces our equity by a good chunk. There's timing issues as we mentioned, which we try to bridge with the financing I talked about. So all in, the lenders are as you say reluctant to finance all of that could be labeled as equity, but it certainly helps quite a bit on the IRR of these projects and the need for equity is reduced significantly.

Speaker 7

Okay. Thank you.

Speaker 2

Thank you, Ben.

Operator

We are now going to proceed with our next question. The questions come from the line of Jessica Hoel from Scotiabank. Please ask your question.

Speaker 8

Great. Thanks so much for taking my question. Maybe just to start, more broadly, can you comment on what you're seeing in the RFP environment? Have you seen some early signs of acceleration just given electric demand is increasing across several of your geographies?

Speaker 2

Yes. First of all, there is clearly there is not yet RFPs, but there is clearly a big program in Quebec for 10 gigawatt plus that will come. We know that this will Hydro Quebec will make RFP to select a partner, private partner per project to develop. We don't know exactly how this RFP will be defined. There is discussion between the industry and Hydro Quebec on this.

Speaker 2

Essentially, it would be on the track record, the skills of the operator in terms of development, operation, maintenance, capability to deploy and experience with them. And we are well positioned since we are their partner on the Dinesh project. If you look to Ontario, there is an RFP coming next year, the LT2. And again it would be a significant RFP for generation and generation and storage. So, that's an important point.

Speaker 2

We are also looking something coming in BC, but we will see where it goes. It's due for mid September. So that's for Canada. And we are also very well positioned with our relation with First Nations in terms of development in Quebec, Ontario and potential in BC2. And you have seen that we just also had a new board member who is an accountant with a lot of experience and also from Inu origin, so bringing lots of expertise and another view to the Board.

Speaker 2

In Europe, as just mentioned at the beginning, the increase of the budget from the UK government is a big signal to show that they want to accelerate and there would be an AR-seven next year. And it just also confirm big investments in the super grid to bring power from the Northern U. K. To the demand area. So and there is a bunch of RFP of 0.9 gigawatt coming in France in the fall.

Speaker 2

So that's there is a lot of things moving.

Speaker 8

Appreciate that. And then just thinking more about the growth path, could you really look to accelerate development of some early stage projects just to be ready for some future RFPs?

Speaker 2

Yes. That's exactly what we are doing in Ontario and Quebec. It takes a little bit more time in France and the UK because in France and the UK the condition to bid you need to be fully permitted. So you do the development work before and not after obtaining the contract. In Quebec and Ontario, it's a little bit different.

Speaker 2

But yes, the team are working a lot and we have had resource since the last years because we were seeing that coming and I think that's a good news because it's now.

Speaker 8

Thanks very much.

Speaker 2

Thank you.

Operator

Thank you. We have no further questions on the phone line. I'll hand back to you for any web question that you may have. Thank you.

Speaker 4

Thank you. All right.

Speaker 1

Thanks a lot, everyone, for your attention. If you have any additional question, please call me. As you know, same number, 514-213-1045. I'll make sure I quickly answer your questions before getting on vacation. So our next call to announce 3rd quarter results will be on Thursday, November 14 at 11 a.

Speaker 1

M. So a nice day everyone and good vacation for those who are waiting for the quarterly season to go on vacation. Thank you. Thank you.

Speaker 4

Thank you.

Operator

This concludes today's conference call. Thank you all for participating. You may now disconnect your lines. Thank you and have

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