Boralex Inc

TSX:BLX

Earnings Call Transcript 2021-Q1

[Operator]

Good morning, ladies and gentlemen, and welcome to the Boralex first quarter 2021 results [Foreign Language] conference call. [Operator Instructions] This call is being recorded on Wednesday, May 5, 2021. I'd like to turn the conference over to Stephane Milot. Please go ahead.

[Stéphane Milot, Senior Director of Investors Relations]

All right, thank you, operator. And good morning, everyone. Welcome to Boralex's first quarter results conference call. Very sorry for the delay. We had a connection problem with the phone line. In fact, so I hope my colleagues will be able to join me soon. So joining me on the line soon will be Patrick Decostre, our President and Chief Executive Officer; Bruno Guilmette, Vice president and Chief Financial Officer; and members of our management and finance teams. So Mr. Decostre will begin with comments about the highlights of the quarter. Afterwards, Mr. Guilmette will carry on with financial highlights, and then we?ll be available to answer all 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. So these documents are all available for consultation at sedar.com. In our webcast presentation document, the disclosed results are presented both under IFRS and on a combined basis. Unless otherwise stated, all comments made in this presentation will refer to combined basis figures. So the press release, the MD&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. So if you wish to receive a copy of these documents, please contact me. So Mr. Decostre will now start with his comments. Mr. Decostre, are you there, Patrick?

[Patrick Decostre, President, CEO & Director]

Yes, just in time, Stephane. Hello.

[Stéphane Milot, Senior Director of Investors Relations]

So you can go ahead then and Mr. Guilmette will follow up with the financial section. Thank you.

[Patrick Decostre, President, CEO & Director]

Thank you. Good morning, everyone. I am pleased to present you our first quarter results to date. It was another good quarter with results and contribution of recent acquisitions in line with our expectations. EBITDA for the quarter was slightly lower than first quarter last year, but this was due to the exceptionally strong wind conditions we had at the beginning of 2020 in France. We have made significant progress on the development front in the quarter with the addition of 180 megawatts of projects to our pipeline, and favorable announcement for the Apuiat and Moulins du Lohan projects. Some smaller projects also progressed in the pipeline from preliminary to mid-stage and to advanced stage. We commissioned our 12 megawatt Bazougeals wind farm in France and we sold our 12 megawatt thermal power station in Blendecques in France. We are now officially a pure play in renewable energy with 100% of our production being renewable.On Slide 5 and 6 of the presentation, as you can see the changes in our pipeline and growth path since the release of our fourth quarter results last February. I'm very proud of all the good work accomplished by our development and support teams continuing to add projects to the pipeline and ensuring these projects are continuously progressing across the different phases, leading to their commissioning. Moving to the presentation of our growth path, as you can see on Slide 7, with the addition of projects under construction, ready-to-build and secured, it represents a potential of 3,058 megawatts of installed capacity, 258 megawatts over our 2023 objective. Please note, however, that some projects, like Apuiat, will be commissioned in 2024. I won't go over all our achievements with regards to our four strategic directions, as presented on Slide 8. But I would like to highlight the optimization of a wind farm totaling 136 megawatts in Canada, optimization of maintenance, as well as the signature of a new 5-year corporate PPA with IBM France. As mentioned before, with the ending of contracts signed 15 years ago in France, additional corporate PPAs and repowering projects are expected in the future. These represent valuable projects, providing interesting returns for a fraction of the time required to execute compared to our traditional greenfield projects.I would like now to take some time to talk about the progress made with regards to our CSR ESG initiative. As you probably have seen, we published our first standalone CSR report at the end of February, which is available on our website. We have made good progress in a short period of time, and this is just the beginning, as I am pleased to announce that the recent hiring of a new Director of CSR, Mihaela Stafanov. Mihaela has a very strong background in the area, having worked more than 12 years in sustainable development, most recently as a senior advisor for a large consulting firm. She will report directly to me, and will concentrate her efforts on continuing to make fast progress in our CSR ESG practice and reporting.As mentioned on our last call, in 2021 we are working on each of the 10 priorities on which we plan to improve and set specific goals in coming years. But we will put further emphasis on three of these priorities, which are diversity and equal opportunities, greenhouse gas emissions and health and safety. We will provide more information with regards to CSR on our upcoming Investor Day which will be held on June 17. As mentioned before, CSR and ESG criteria are an integral part of our strategic plan. So stay tuned and we will have interesting things to share. This completes my part. I will now let Bruno cover the financial portion in more detail, and will be back later for the question period.

[Bruno Guilmette, CFO & VP]

Thank you, Patrick. Good morning, everyone. I will start with a review of the good progress made in light of our 2023 financial objectives. At $142 million, our AFFO for the last 12 months is in line with our $140 million to $150 million objective. Our dividend distribution ratio stands at 47%, in line with our 40% to 60% target. And our net installed capacity stands at 2,455 megawatts, which is getting closer to our 2023 objective, as mentioned earlier by Patrick.Now moving to the analysis of our first quarter, as shown on Slide 13 in our presentation document, comparable production of our Canadian wind operations was 2% lower than anticipated production, but 1% higher than the same quarter last year. Wind conditions were weak at the beginning of the year, but picked up significantly at the end of the quarter. Production from the acquisition of the CDPQ share in three wind farms in Quebec was 8% higher than anticipated. In France, comparable wind production was 2% lower than anticipated, and 26% lower than the same quarter last year, which had exceptionally strong conditions. Overall, total wind production for the quarter combining Canada and France was only 1% lower than the anticipated production, and 4% lower than last year. Turning to hydro now, Canadian hydro continued to perform very well with production 25% higher than both anticipated production and last year's production for the same quarter. Conditions were, however, more difficult in the U.S., where production was 22% lower than anticipated and 35% lower than the first quarter last year. Overall, the hydro segment reported production 3% lower than anticipated and 14% lower than last year for the same quarter. In the solar segment, production from the acquired participation in 7 solar power stations, CRE in the U.S., was 8% higher than anticipated. In summary, total production for the quarter was 1% lower than anticipated and was in line with the comparable quarter last year, including the contribution of our 2 acquisitions and the commissioning of wind farms.First quarter revenues were down 2% compared to last year due to less favorable resource conditions than a year ago, as mentioned before. For the first quarter of 2021, EBITDA adjusted was $162 million compared to $169 million for the same quarter of 2020. Net earnings were $43 million in the first quarter, compared to $37 million last year. We generated $150 million of IFRS cash flow from operations in the first quarter, compared to $124 million in the same quarter last year, reflecting acquisition-related costs and incremental interest, but in connection with the acquisition financing. The FFO was $60 million compared to $68 million in the first quarter last year, reflecting the reduction in the cash flow from operations. As indicated on Slide 17, our financial position remains solid with our net to total market cap ratio of 45% on March 31, 2021 compared to 41% on December 31, 2020. In conclusion, we are making constant progress in the execution of our strategic plan. We are working on our submissions for upcoming bids with our greenfield projects located in Upstate New York. We have a solid financial position to pursue our growth initiatives and we are putting the final touch to the update of our strategic plan which will be unveiled on June 17 during an Investor Day. So please save that date. Thank you for your attention. We are now ready to take your questions.

[Operator]

[Operator Instructions] Your first question comes from David Quezada with Raymond James.

[David Quezada, Equity Analyst]

My first question here, just maybe a little bit on the longer-term outlook. I know that you have obviously a lot of runway for growth in France, maybe not so much in the near term, but there's a lot of volume expected there, as well as in Quebec and New York. I'm wondering if you could just maybe touch on if you have any color on what you're doing to fill the top of your funnel of potential projects, be it land lease activity or things like that, anything that could be a source of greenfield development a few years down the road.

[Patrick Decostre, President, CEO & Director]

Yes, just if you look to our pipeline and the mentioned funnel, we have increased during this quarter with 180 megawatts this part of the pipeline. This is the entrance in the pipeline, and some of the projects have gone from preliminary to mid-stage or advanced stage directly. So this is where we make progress and we are very active. It's something at the very beginning of the crisis we -- if you look back to Q3 or Q2 last year, it was more difficult. But now since Q4 and this quarter, it's really going well and I think it's the right way to develop projects. And we are doing that in France and in North America both.

[David Quezada, Equity Analyst]

Excellent. Thanks, Patrick. And then maybe just one more, I know that you had the corporate PPA with IBM in France. It's certainly an interesting arrangement. I'm just wondering if you could talk about, are you starting to see some real momentum in corporate demand for renewable power in France? It seems as though you've had several corporate PPAs recently. Could you just talk about the outlook that you see there, I guess may for repowering and re-contracting over the next little while?

[Patrick Decostre, President, CEO & Director]

Yes, it's exactly as you mentioned. There is a new real trend of big large corporations to sign with a company like us. So should we have more electricity available not under contract, we could sell it today. So it's really an avenue and there is more demand than what is supplied by the system. And we are also for each project looking to the possibility of repowering, because with repowering we are producing generally more electricity, more turnover and on the long term -- and catching long-term contracts which is interesting too. And you have some details in the investor relation presentation, if you want on this, on each year and our strategy.

[Operator]

Your next question comes from Rupert Merer with National Bank.

[Rupert M. Merer, Managing Director and Research Analyst]

So I realize you're going to update your strategic plan on June the 17th, and I'm looking for a little bit of a preview here. Anything you can tell us on what that plan might look like? How far out do you think you'll be looking? And I imagine you'll be setting higher targets for production in the future. Will you contemplate going into new regions and maybe even new types of resources? Anything you can tell us on what we should be looking for from Boralex in the future?

[Patrick Decostre, President, CEO & Director]

Okay, one point, we have a process of approving the plan. We have just, as you know, a board yesterday. So we are making good progress and discussing that. We have some work to continue. So really I will not give any point today, and will ask you to be patient, Rupert, and wait for June 17. But we will take into account the situation of the company, which is very healthy, and the different opportunities on the different markets and continue in the same philosophy than before.

[Rupert M. Merer, Managing Director and Research Analyst]

Okay, well I had to try. With regard to your acquisitions in California, can we imagine that maybe you'll expand the areas of focus a little bit in the future?

[Patrick Decostre, President, CEO & Director]

Yes, yes. Two years ago, we start in the U.S. by the State of New York. We have been very successful. I hope we will continue to be. I think we will continue to be successful there. We have an established team and we have an established pipeline of projects at different stages of the organic pipeline. And now it will be time to look at other states in the U.S. And typically, as I mentioned in February, California will be one of these. And this is not new, but we will come some more structured presentation on June 17.

[Rupert M. Merer, Managing Director and Research Analyst]

Okay, great. Then as a follow-up to David's question on the corporate PPAs in France, I'm wondering if you can give us a little more color on the IBM PPA, if you can talk maybe about the scale of that transaction. And I noticed you're working with Axpo as an offtaker. Can you talk about how the contract is structured with the aggregator and is this going to be the model that you'll use in the future?

[Patrick Decostre, President, CEO & Director]

Yes, unfortunately we have a confidentiality agreement with our client. And so I really refer you to the press release of the April 30. This is the maximum I'm allowed to share with you. It's an important 5-year contract. It will be on the asset ending their contract with EDF, no new asset. But I cannot go further than this, Rupert. I'm sorry not to answer your questions this morning really.

[Rupert M. Merer, Managing Director and Research Analyst]

Well maybe if you can talk a little about the dynamic, how you work with an aggregator and in general how much value can you add to a contract--

[Patrick Decostre, President, CEO & Director]

But globally, generally, the role of the aggregator is to make the equilibrium on every 15-minute period of the electricity which entered in the system, and the electricity which it's taking out of the system. So this is the role of an aggregator. We have not that internally yet. And so sometime we're working with Axpo. Sometimes we can work with other aggregator. We have done that in the past also. But we need to have this partnership. But we are selling the electricity from one site or different sites in this case, and then the aggregator plays the role of what is the demand of the customer and what is the production of Boralex on the different site of Boralex, and make the equilibrium of this. And our added value is to have access to wind electricity, which is -- I don't know the exact figure, but 99% of the wind production in France is contracted with EDF. So there is no electricity available to be sold. And just to companies like us, which contract starting more than 15 years ago, have access to this kind of green electricity in France today.

[Rupert M. Merer, Managing Director and Research Analyst]

As you move forward and you start looking at storage projects, is this a capability you'll be able to provide in-house increasingly in the future?

[Patrick Decostre, President, CEO & Director]

We are exploring this and exploring if it is the right alternative to do it internally and not to subcontract it, because sometimes storage can be a solution. Sometimes the market is an interesting storage too. And then there is different alternatives under analysis for the moment.

[Operator]

We have the following question from Nelson Ng with RBC Capital.

[Nelson Ng, Analyst]

My first question relates to the growth path. You obviously have a lot of secured projects listed. And I think the New York solar projects are supposed to go into -- or they're supposed to be completed in 2022-2023. Can you just tell us how the progress is with those New York solar assets in terms of permitting and other requirements? Are they on track to be completed in '22 and '23? Just wondering when you would move those projects over to the construction-ready stage.

[Patrick Decostre, President, CEO & Director]

Yes. They're in secured stage, they are not yet under construction stage, but there is two important points. The first is we have accepted NYSERDA proposal for the conversion into IREC. So that's good because -- and the proposal we get was in line with what we were expecting at the end of last year, beginning of the year when the question of IREC was discussed. It's good for the economy. It's good for the financing of the project. And on the development side, it's going well, even on one of the projects, we have one of the 20-megawatt projects we have very good news in terms of cost of connection. So the final investment decision is not yet taken. This is why it's not yet under construction, but it's online, say, to be connected next year and the year after.

[Nelson Ng, Analyst]

Okay. That's great news. And then my next question is just a quick follow-up on the corporate PPAs in France. So I think you have -- you don't have too many wind facilities or megawatts expiring in terms of PPA expirations this year and next year. But can you just talk about whether you're currently selling or how many megawatts you're currently selling in France as merchant? And do you actually have much more room to do corporate PPAs, given that there's not too many PPA expirations? Can you just give some color on that versus, I guess, reserving some capacity for future repowerings as well?

[Patrick Decostre, President, CEO & Director]

Okay. Exactly, we have -- we are selling purely merchant, 8 megawatt, which is just one small site, and this is essentially to the idea is to learn and to work on learning how the market is working. We have done some shadow testing in the past. So first, some back testing, then some shadow testing, then we are in real-life this year, but just with 8 megawatt. And so this is for purely merchant. We have 3 contracts which are signed today, one with IBM. But as I mentioned earlier, I cannot disclose figures for this contract. We have one with Orange for 39 and one with Auchan for 16 megawatts. But this is not merchant. This is corporate PPA. And we have another one which is under advanced negotiation for another roughly another 10-megawatt site. So this is exactly what we have. So I do not expect to have more than 8 megawatt purely merchant during this year or next year.

[Stéphane Milot, Senior Director of Investors Relations]

Nelson, on that, Stephane speaking. So if you want to have further visibility on that, I encourage you to look at our IR presentation where we go 5 years out. So you'll see more on that. And as we're saying in this slide, at this point in time, it's about 60% that we expect to repower and the balance is going to be a mix of corporate PPA and merchant going forward. And more info will also be provided at our Investor Day on this front, of the customer orientation.

[Nelson Ng, Analyst]

Thanks, Stephane. Thanks for the color. My last question might also be addressed during the Investor Day next month. But I just want to ask you, Patrick, in terms of growth through M&A versus development. And we've recently seen some assets switch hands in the market, particularly with Brookfield Renewable with some strategic buyers. I guess, you acquired some solar assets in the U.S. to give you a footprint there and some meaningful solar assets. Given all the activity that's happening in the U.S., do you feel that you need to acquire any wind assets in the U.S. to get you started there? Can you just talk about any kind of potential assets or geographies you feel, any asset acquisitions could help you with?

[Patrick Decostre, President, CEO & Director]

Yes. Any acquisitions have to be a way to accelerate somewhere our strategic plan. So we are firstly looking to solar assets in the U.S. But as you know, we are wind guys, I would say. And we like this. So potentially, we are also looking to some wind assets when it's a way to accelerate our diversification, and this is something we are looking at, yes.

[Operator]

Your next question comes from Mark Jarvi with CIBC.

[Mark Thomas Jarvi, Director of Institutional Equity Research]

Patrick, you said that the index REC or the IREC has sort of met your expectations. Are you able to share any of the pricing on those contracts and whether or not they have inflation escalators or anything else you can share now that you've signed those contracts?

[Patrick Decostre, President, CEO & Director]

No, I'm not able to share the price. I'm not able to share the price, but what I can tell you is that taking everything into account, the cost of construction, view from today, the production of the site, the optimization of the layout, the connection costs and all those things and the financing, we have improved the return expected in September 2019 when we bid these projects. So it's good for 2 reasons. One reason is that less risk because of IREC contracts, and on the other side, an improvement of the return.

[Mark Thomas Jarvi, Director of Institutional Equity Research]

And does the IREC and making it a simpler product enhance the financing of the project? Does it make it easier to finance? Or is it just more on project optimization in terms of cost, interconnection and expected capacity?

[Patrick Decostre, President, CEO & Director]

Bruno, maybe some color on that?

[Bruno Guilmette, CFO & VP]

Yes, Mark, it will certainly make the financing easier with a more simple contract approach.

[Mark Thomas Jarvi, Director of Institutional Equity Research]

And then can you just update us in terms of the financing, tax equity? Is the idea to do it on sort of a collection of assets? Do you do this on 1 or 2 assets as they get closer to completion? What's the sort of strategy on tax equity? And how far down on the road are you in terms of any negotiations and your confidence level that you'll be able to pull that all together in time?

[Bruno Guilmette, CFO & VP]

Confidence level is good. And we're not -- we don't need to be advanced at this stage. So we're on time on that front. And in terms of the approach, we'll likely consider different approaches for our U.S. assets, depending on our strategy. We're looking at different types of financing, whether project financing and/or a combination with balance sheet financing. So in the U.S., our strategy might be a little bit different overall on the financing side than what we've done, for example, in France.

[Mark Thomas Jarvi, Director of Institutional Equity Research]

Okay. And then on those corporate PPAs, I appreciate at this point, they're still a small component of your earnings and EBITDA. Are there any sort of nuances or risk to those contracts in terms of settlements, minimum volumes, anything around like where your delivery points versus pricing the aggregator? Just maybe help us understand if there is any sort of risk that you have to manage from your perspective on the delivery.

[Patrick Decostre, President, CEO & Director]

No. Generally speaking, all these contracts are pay as produced. So we have no commitment of production. So it's really the same kind of risk than with the EDF contract. We have, in one contract, one of these contracts, some say, warranty of the operation of the site, because you understand that the customer is buying the electricity from one site, and there is a marketing ID behind this. So they don't want to be -- that if we do not operate correctly the site, typically if we are lower then I think it's 90% of availability, which it's never the case obviously, then they have the possibility to cancel the contract. But obviously, we are not there. So this is the only one, but we have no delivery guarantee or things like this, and so no additional risk on this contract.

[Operator]

Your next question comes from Naji Baydoun with IR Capital Markets.

[Naji Baydoun, Equity Research Analyst]

I'm just wondering if we can follow up on the asset sale in France. Can you maybe talk about if you're considering other asset sales to help finance some of your -- some of the larger growth projects that are coming down in the pipeline?

[Patrick Decostre, President, CEO & Director]

The sale of Blendecques was essentially a reason of maintaining, say, skills internally for a small asset, being 100% renewable, not exposed to carbon pricing anymore and all those things. So this is one reason. But generally speaking, and it's not only the case in France. We are also all the time evaluating if partnering with another, say financial provider, could be of interest to us with -- if they have a lower cost of capital than Boralex, so we are all the time looking to this, and this is the case. And the valuations are -- if you look to the French market, different operators have looked to this and go through this process during the last year. So we are also screening this and the possibility, but nothing other than that.

[Naji Baydoun, Equity Research Analyst]

Okay. And I don't want to take away any of your thunder from the upcoming Investor Day. But just wondering if you can talk briefly about how you're thinking about your approach to project development in newer markets like in California or other U.S. jurisdictions. Do you think that you'll need to adjust your project development processes or bidding behaviors in those markets to be competitive?

[Patrick Decostre, President, CEO & Director]

How to end? Yes, on the one side, we have developed projects in New York state with people, some in New York, some in Ontario, some in Quebec. So we can do -- and when you look to other pure organic developers, they are many times doing that remotely from somewhere in the U.S. So we don't think we need teams everywhere. So we will need some local presence, but not a big one. And we will try to stay -- with the crisis, we all know that a lot of work could be done from home, so not so remotely. This is the first point. And in terms of bidding, we will look to market where, like in New York State, there is an interesting situation of demand for projects, and they are contracts which are with reasonable risks. So our bidding strategy will, say, not change and we will be disciplined on what we -- how we build the model for the project and how we evaluate the risk on it.

[Naji Baydoun, Equity Research Analyst]

Okay. Okay. That's great. And just one last question as a follow-up to that. I guess you're not really expecting a major ramp-up in either new hiring or development costs or corporate costs at this point to support new expansions.

[Patrick Decostre, President, CEO & Director]

We will, I think, again, that will be released on the Investor Day in June and presented. So I will ask you to be patient, Naji, on this part of the presentation.

[Operator]

Your next question comes from Andrew Kuske with Credit Suisse.

[Andrew M. Kuske]

I guess, this may be a bit more of a philosophical longer-term question, and it really revolves around how you see batteries being part of the investment opportunity and then maybe also part of the threat that exists for the business and just your positioning around that.

[Patrick Decostre, President, CEO & Director]

It's a good question. It's interesting. Indeed, I think we can see that in Europe, in some markets, we can see that already in California, typically is a great connection and duck curves the fact that the electricity price is changing -- the shape of the price is changing during the day, is an opportunity for storage. The question is how do you make money and how you secure your investment? So it's not -- it's something which is more close to kind of merchant sale, from my view, than what we have in the past with as-produced long-term PPA. But it could be this long introduction to say it could be of interest to optimize existing sites with small investment to move production from one part of the day to another. And it depends on the market and the contract that you have. So this is the first point. In terms of threat, I'm not sure it's more creating something -- I think, an opportunity to the electricity system than a threat because it should smooth the electricity price during the day. So I think it will increase the capacity technically of the electricity system of a larger penetration of variable renewables like wind and solar. So I think it's more opportunity than a threat.

[Andrew M. Kuske]

That's very helpful color and context. And maybe just focused on that opportunity, do you foresee Boralex pursuing some opportunities in relation to energy management, maybe at a commercial industrial level for certain corporate customers with the rollout and deployment of batteries into the future?

[Patrick Decostre, President, CEO & Director]

Yes. It's exactly something we are -- we have started in France at a small level. The same team is working on defining and modeling the price -- it was obviously Bruno's team -- but bundling the price for the bid for the tender, for the EDF tender, for the tender when corporate PPA is available. So somebody wants to buy electricity like IBM, like Orange, they are going through RFP, and we have to modelize that and the management of our small 8-megawatt merchant production. So all this is the same kind of data analysis, knowing how the market is moving and all this is linked to -- so we have started this team in France, and we're sharing this every month. We have an update on that at the investment and development committee of the company. So even in North America, people are learning, thanks to our experience in France. It's small, but it's the way to learn and not to take too much risk.

[Operator]

We have a following question from Rupert Merer with National Bank.

[Rupert M. Merer, Managing Director and Research Analyst]

So in your prepared remarks, you talked about preparing bids for New York auctions. Just wondering if you can give us an update on where we're at in the process for the New York auctions and what you anticipate you might be able to do there. And also, same thing for France, where are we in the French RFP cycle?

[Patrick Decostre, President, CEO & Director]

Okay. On the New York, I will just comment on the Tier 1. There was -- there will be a Tier 1 auction in the end of the summer. So we will bid the 180 megawatts we bid at the last auction. And we have worked for, say, another year of development, so you can evaluate, I think, how much organic project we are able to develop in 1 year, like in the past. So we will bid at this stage. And we are also evaluating the T4. But this is too close to the bids to comment. So this is for New York state. On the French side, the first -- okay, I mentioned 180, it was 140, sorry, at the last bid, so it's not 180 million, sorry. I made a mistake. On the French side, the 6 first rounds of the tender have now been done. And so the government is -- the administration is discussing what they call the [Foreign Language] which is the rules to bid and the rules to win. So it has not yet been released. So we are thinking that for 2020, when the tender will come end at the summer, beginning of the fall, and we're working to evaluate how many projects we will be able to bid. It will depend on the [Foreign Language]. So that's the point. And we are also -- in France, we have still access for the -- the small, say, project, the project of less or equal to 6 turbines and less or equal to 3-megawatt per turbine to the CR 2017 at EUR 72 per megawatt hour. So we are playing the 2 games in parallel.

[Rupert M. Merer, Managing Director and Research Analyst]

Okay. Great. And then looking at your secured projects, can you give us an update on the 2 big ones, the Limekiln and Moulins du Lohan and the opportunity to move those to construction? How far are you from final investment decision on those projects?

[Patrick Decostre, President, CEO & Director]

I would say Moulins du Lohan, it's more a question of weeks because the decision from the Conseil d'Etat is final. Grid connection was put on the shelf, but it's still available and it has been already modified to 71 megawatt. And as you know, we have a contract that we win on the last tender. So it's a question to, say, finalize, update, everything and go back to our board and decide some negotiation with the turbine suppliers also need to be done. And for Limekiln, considering the change in the charges, the access to the network charges, the use of system charges in the U.K., we have applied exactly 1 year ago in May 2020 for the extension of the site. And we have applied also for a modification of the size of the turbine, like every -- to my knowledge, every Scottish project, of the different operators have done this, because they have been hit by the change of the charges. So there will be, I think, a public hearing in June on Limekiln, and then we could expect -- depend of how diligent the Scottish Minister will be, we could expect in the next, say, 6 to 9 months, a decision. And again, there, we already have the connection in our end, which is very important when you are up North there. So this is the situation of Limekiln. And there was some discussion last year about a potential new CFD for onshore wind in the U.K. To my knowledge, it's not yet done, but potentially, this will also move in the next months to help us to finalize the economics of this project and the financing of it.

[Operator]

[Operator Instructions] It appears there are no further questions at this time. You may proceed.

[Stéphane Milot, Senior Director of Investors Relations]

A: All right. So thank you, everyone, for your attention. If you have any additional questions, please call me at [phone]. I will make sure we quickly answer your question. So our next conference call to announce second quarter results will be on Friday, August 6, 2021. In the meantime, as we mentioned during this call, please mark your calendar for our Investor Day on June 17, as the formal invitation will follow shortly. And lastly, we have our Annual General Meeting in an hour or so at 11:00 starting. So I hope you all remain healthy. Have a great day. See you soon. Bye.

[Operator]

Ladies and gentlemen this concludes your conference call for today. We thank you for participating, and ask that you please disconnect your lines.