French independent power producer (IPP) Neoen is aiming to more than double its renewable power capacity in the next four years.
The company, which reported a 25% increase of its EBITDA in the year to December at €270.4 million (US$323.6 million) in its full-year results today (11 March), plans to have more than 10GW of renewables either installed or under construction by 2025, up from 4.1GW last year. The company’s pre-tax earnings fell in-line with the lower-end of expectations last July, when it forecasted an EBITDA margin of more than 80%.
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The wind, solar and battery storage developer and operator said in a statement it will “progressively accelerate” its new development pipeline, with an aim to win 2GW of projects per year from 2025. It will focus on expanding its presence in countries it already operates in such as Australia, where the IPP is currently working on what, at 460MWp capacity, stands to be the country’s largest solar farm. Neoen said that around 80% of new projects over the next five years will come from its existing markets. “We are on known terrain”, chief executive Xavier Barbaro said in a webcast today.
The new 10GW target is expected to cost €5.3 billion, Neoen said, adding it hopes to raise €1.2 billion (US$1.44 billion) of additional capital between 2021 and 2025 to meet this. However, this figure would not be reached in a single issue and could be reduced by selling stakes in some assets, Barbaro said. Further investment for the projects will be sourced from cashflow from existing assets in Neoen’s portfolio.
At the same time, the company has not ruled out making acquisitions in of devalued assets with restructuring potential or generating assets near to the end of their life with repowering potential in order to hit the 10GW capacity mark, it said.
The company now expects its EBITDA to rise again this year, reaching between €295 million and €325 million and again amounting to a margin of 80%.
So far, it has an advanced pipeline of 6.9MW, and a further 4GW in early stage development. Although it plans to take part in government tenders, Neoen said it will “prioritise” securing long-term power purchase agreements (PPA) with “solid counterparties” such as industrial companies. The company is already investing €1.2 billion in a French large-scale solar-plus-storage project with utility Engie, with which it will generate revenue from over-the-counter contracts with businesses.