SCATC.OLSCATC.OLOSL
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Terje Pilskog: Good morning, everyone, and welcome to our fourth quarter presentation. Our growth continues, and we deliver on our strategy with a high level of activity across all of our segments and all of our portfolio. We are growing our pipeline. At the same time, we continue to also strengthen our financial position. And we are operating in markets with strong underlying demand, and we're focusing on markets with strong underlying demand for clean, affordable and flexible power. Renewable energy is the most competitive source of power generation in our markets, and we continue to see strong and attractive long-term demand for renewable energy in our markets. And this is reflected in the additional projects that we are able to secure in our markets, and it's also reflected in the growing pipeline that we are presenting today. And today, I will start with a summary of our 2025 achievements, and then I will take you through the highlights of the quarter. Hans Jakob will go through the financials. And then at the end, we will also provide comments on our outlook for 2026. And then to summarize our full year 2025, we are scaling the platform while maintaining -- continuing to maintain financial discipline, and we have also strengthened our balance sheet. We see strong near-term growth, and we have 11 gigawatts of generation capacity across our projects in operation, in construction and in our backlog. And this is our largest near-term growth that we have ever had. We have also significantly strengthened our position in storage and hybrid solutions, reflecting the increasing demand for flexible and hybrid systems. Our growth portfolio now includes more than 6.5 gigawatts of battery storage systems. And this development is supported by battery prices falling over the past 2 years, and we aim to continue to increase our pipeline in this space. During the year, we have also reduced our gross debt -- corporate debt by 25% and our corporate debt now stands at NOK 6.7 billion. And this is something that we have done while we continue to invest in new projects and new capacity. So overall, I'm very happy with the performance that we have achieved last year, and we are proving that we can execute on growth while we continue to deleverage, building a resilient and a very scalable platform. So let me then take you through the highlights of the last quarter. We delivered strong group revenues of NOK 3.4 billion. This is an increase of 25% relative to the same quarter last year, and this is mainly driven by high activity in our Development & Construction segment. We have very good progress on our projects under construction. And in the quarter, we recognized NOK 2.3 billion in revenues and also a gross margin of 14%. And the key drivers here were Obelisk in Egypt and also the Mogobe BESS project in South Africa. And it's important to emphasize that the attractive gross margin that we are recognizing, it is based on a very strong underlying economics of the projects that we currently have in our construction portfolio. We also continue to mature our pipeline and secure new projects for future growth, with the backlog now reaching an all-time high of 5.3 gigawatts of generation capacity and 4.7 gigawatt hours of battery storage capacity. This is driven by new PPAs that we've been signing over the quarter in Egypt, in Tunisia and also in the Philippines. And one of these projects, which is Energy Valley, is really a landmark project in Egypt, and we will come back and talk a bit more about that later. In parallel, we have also improved our corporate debt maturity profile. We have issued a new bond in November during the quarter. We also paid down the term loan. And at the end of the quarter -- at the end of the year, we have a very strong liquidity position of NOK 5.6 billion. So with that, let me also then take you through the key elements of the Power Production segment. Last quarter, we generated 1 terawatt hours, and this is in line with last year when we adjust for the divested assets. New projects contributed with 73 gigawatt hours. This is from Grootfontein in South Africa and it's also from the Mmadinare project in Botswana. While when it comes to the Philippines, we generated slightly lower megawatt hours, and this is due to hydrology. Revenues from power production amounted to around NOK 1.1 billion, and this is broadly also in line with last year when we are adjusting for the divestments that we've done. And overall, this demonstrates the resilience and the predictability of our contracted generation portfolio even as we continue to actively optimize our portfolio. Now a few words on Ukraine. And here, the ongoing war obviously represents challenging environment, a challenging environment for operations. We own and operate 5 projects in Ukraine in the central and the southern parts of Ukraine, with a total capacity of about 336 megawatts. And during the fourth quarter, the substations and transformers related to one of our projects were targeted and damaged by Russian drone attack. Our first priority in this situation is our employees in the country, and it's very good to know that those are unharmed at least physically after this drone attack. But the power plant is disconnected due to the damage and is currently not delivering energy onto the grid. Ukrenergo, the state-owned utility and our team is working very hard to repair the damages, and we are currently targeting to get the plant reconnected to the grid and start delivering energy again in the beginning of the second half of this year. This is obviously impacting the power generation from Ukraine during the year, and Hans Jakob will come back and comment on this also in the outlook for the year. So let me now talk about the Philippines. Here, we delivered yet another solid quarter, and the Philippines continues to be a major financial contributor to the company. We generated 249 gigawatt hours in the quarter. And despite the slightly lower generation compared to last year, the financials from Philippines were better than last year. Overall, we reached net revenues of NOK 403 million. This is up from NOK 390 million same quarter last year. And here, we are now seeing the benefits of having a flexible asset portfolio and active trading operations in the country. This is now demonstrated based on the several -- as we have several revenue streams and that we're able to capture attractive trading opportunities. And through this, we are able to deliver good and strong financial results despite the fact that the hydrology is slightly lower in the quarter. And we also continue to allocate a significant part of our capacity to the ancillary services market in the country, again, based on the fact that we are seeing attractive revenue opportunities, earnings opportunities in that segment and based on our ability with the flexible asset portfolio that we have. Prices in the quarter were also up. And additionally, we've been able to capture higher-than-average prices on our contracts, and this is also contributing to the financials. So in terms of EBITDA, that increased by NOK 31 million in the quarter to NOK 363 million. Then in terms of construction, we currently have 1.5 gigawatts of solar and 700 megawatt hours of battery storage projects under construction in 5 different countries. Andreas is fixing that. In addition to this, we are also progressing well in our release platform, and we are also having a few projects in that platform being installed as we speak. Since last reporting, we've had a very good construction progress across the portfolio, and we have recorded NOK 2.3 billion in revenues and a gross margin of 14%, as I've already said. And the EBITDA for the D&C segment was NOK 251 million, which is a very high level. Grootfontein in South Africa and also the second phase of Mmadinare project in Botswana reached COD during the quarter and is now in operation. In Tunisia, we target COD for the Tozeur project and the Sidi Bouzid project by the end of the quarter. And for the solar project in Brazil and also for our battery projects in the Philippines, we are expected to reach COD by the end of the first half of the year. When it comes to Mogobe in South Africa, our first battery project in South Africa -- so when it comes to the solar project in Brazil and also the battery projects in the Philippines, we are expecting to have COD by the end of the first half. And then when it comes to Mogobe, our first stand-alone project -- stand-alone BESS project in South Africa, we are for this project expecting to reach financial close in the second half of this year. In general, I'm very pleased with the progress that we're seeing on the construction activities across our portfolio, and I'm very proud of the teams that are doing a very good job on this. At the end of the quarter, we have NOK 1.8 billion in remaining contract revenues related to the projects that we currently have in construction, and we continue to expect to have a gross margin of 10% to 12% related to these projects. Beyond this, obviously, we continue to mature the projects that we have in backlog, and we foresee that we're going to continue to have a high activity level in the Construction segment going forward. Now let me also take some time to appreciate our largest project to date, the Obelisk project. Total CapEx of this project is close to NOK 6 billion. And then it's finished, it will generate in the range of 3 terawatt hours on an annual basis, and it will provide 1.3 million tonnes of CO2 emission reductions. It's a massive project, and it's being constructed at record pace. We have already completed phase 1, which is including 50% of the solar capacity, 100% of the battery capacity and obviously also a very large substation. And this is only about 15 months since we signed the PPA. We are having about 5,000 people on site, and this team is installing in the range of 200,000 modules on a monthly basis. So we're working very hard to secure commercial operation for phase 1 ahead of schedule by the end of this quarter and also accelerating the completion of phase 2, and we're targeting to reach COD for phase 2 already this summer. And obviously, building this project, constructing this project gives us a lot of very valuable experiences and learnings. And we will use these learnings when we're now moving forward also and preparing to start construction for the other projects in Egypt, like, for instance, Egypt Aluminium and also the Energy Valley project. I will now zoom out a bit and talk about our growth portfolio. We have an all-time high backlog of 5.3 gigawatts of generation capacity, and this is including projects in Egypt, in South Africa, in Tunisia, in Romania and in Colombia. And then the construction of these projects, including the ones in backlog, have been completed over the next few years, we will reach a total generating capacity of 11 gigawatts. This is up 2.5x relative to where we are today. In addition, behind this, we have a pipeline of 7.4 gigawatts that obviously we will continue to mature and convert into backlog also over time. Our growth portfolio also includes battery storage, either in hybrid systems or as stand-alone storage systems. Here, we have a backlog of 4.7 gigawatt hours in South Africa, Egypt and the Philippines. And we have now chosen to show this portfolio separately so that you can see also how this is growing over time, and we believe that there's going to also be significant growth opportunities in this space going forward. And let me now also turn at the end to a landmark agreement signed in Egypt, which is a 25-year PPA for 1.95 gigawatts of solar and 3.9 gigawatt hours of battery capacity. So the Energy Valley project, as you will see on this page, includes 2 stand-alone BESS installations and 1 solar and battery hybrid facility. And part of the production from this hybrid facility will be used to provide 24/7 green baseload power. And this is a first of its kind. The project will generate about 6 terawatt hours when it is in operation, it will provide about 2.4 million tonnes of CO2 reductions, and it will save Egypt $150 million on an annual basis in saved fuel costs related to the alternative, which is running their thermal power plants, $150 million on an annual basis. And with the signing of this agreement, we are cementing our position in Egypt as one of the leading players in renewable energy in the country, and we have a very strong team on the ground, which is driving this. And in total, we now have 5 large growth projects in Egypt across different technologies, solar, wind, batteries and green hydrogen. These projects, they will generate substantial D&C revenues over the next few years as we move them through construction. And on a longer-term basis, obviously, they will also generate predictable revenues in the Power Production segment related to the 25-year PPAs that we have for these projects. And finally, also this portfolio will contribute to reduction of 5 million tonnes of CO2 emissions. And just for reference, this is more than 10% of Norway's CO2 emissions on an annual basis, more than 10%. So we now focus on finalizing construction of Obelisk and securing partners and financing for this portfolio with the aim to move this portfolio into construction by the end of this year. So with that, Hans Jakob, I will hand it over to you to take us through the financials.
Hans Jakob Hegge: Thank you, Terje. Is the Microphone okay? Yes. So it's been said before, but we are pleased to present strong results across the group, high D&C activity and a good quarter in the Philippines. I'll walk you through the group financials and the performance of our operating segments. And I will also comment on capital structure and further improvements. Starting at group level performance. The last 3 years has been a transition period with increased capital recycling and accelerated growth. The full year consolidated revenues was NOK 5.2 billion and EBITDA NOK 4 billion. Our proportionate revenues was NOK 11 billion and EBITDA NOK 4.6 billion, both positively impacted by the D&C segment. Looking at the quarter on group level, the all-time high D&C activities driving proportionate revenue growth, positively impacting our group financials. Consolidated revenues was NOK 1 billion compared to NOK 1.1 billion in the same quarter last year. EBITDA reached NOK 697 million compared to NOK 816 million year-on-year. The reduction is mainly driven by divestments, which has been instrumental to our long-term strategy of funding growth and reducing debt. This will result in additional revenues from new projects and lower interest expenses and reduced debt. Our proportionate revenues was NOK 3.4 billion compared to NOK 2.7 billion in the same quarter last year. And the proportionate EBITDA was NOK 1 billion compared to NOK 1.4 billion year-on-year. Now let me take you through the segments. Starting with Power Production, which delivered revenues close to NOK 1.1 billion compared to NOK 1.6 billion in the same quarter last year. The reduction is mainly explained by the divestment gains of NOK 380 million booked in the fourth quarter last year. EBITDA was NOK 842 million. And on a 12-month rolling basis, you can see stable development adjusting for sales gains as we are managing to offset the EBITDA from divested assets with new projects. The last 12 months, we have delivered NOK 5.2 billion in revenues and NOK 4.3 billion in EBITDA. Overall, we are very pleased with the value generated from our operating assets. In our Development & Construction segment, activity levels continue to increase. Proportionate revenues more than doubled to NOK 2.3 billion and EBITDA was NOK 251 million, significantly up from the NOK 51 million in the same quarter last year. The trend from the last 12 months confirms the long-term strength and scalability of our D&C business, underlying strong growth. D&C revenues in the last 12 months have reached NOK 5.8 billion with a steady increase over the last quarter, 5 quarters in a row. The rolling EBITDA ended at NOK 462 million, with contribution from high-margin projects and disciplined cost control. The increasing trend reflects higher activity levels across several geographies with Obelisk in Egypt and Mogobe in South Africa being in the forefront in this quarter. With a strong backlog, including 8 projects in 5 countries expected to start construction in the first half of this year, we expect D&C to remain a key engine on our continued profitable growth. At the end of the quarter, we had available liquidity of NOK 5.6 billion. Let me explain some of the main movements. We received NOK 631 million in distributions from power plants, had positive working capital movements of NOK 596 million, mainly related to milestone payments for Obelisk. We invested net NOK 220 million in growth projects and paid NOK 130 million of interest and reduced our corporate debt by NOK 73 million. The EBITDA from the D&C covered investments in the quarter, which is a confirmation of our robust business model and the RCF is currently undrawn. We continue to strengthen our capital structure. Net corporate debt was reduced to NOK 3.4 billion, down from NOK 5.6 billion in the second and NOK 4.3 billion in the third quarter. The reduction was mainly driven by the change in cash of NOK 900 million. We also repaid the outstanding term loan with the proceeds from the NOK 1 billion bond. On project level, net debt increased by NOK 800 million to NOK 16.7 billion, and the project debt in operation increased by NOK 2.3 billion as Grootfontein in South Africa and Mmadinare project in Botswana, debt moved to operation after COD and the net debt for projects under construction was reduced by NOK 1.4 billion. And now the outlook for the year. So commenting on the 2026 outlook, I will start with the full year estimate of Power Production between 5.2 and 5.6 terawatt hours. Our estimated full year EBITDA is in the range of NOK 3.8 billion to NOK 4.1 billion. And let me explain some of the main items affecting the guidance compared to the NOK 4.3 billion we delivered in the full year last year. Last year, we reported NOK 500 million in divestment gains and operational EBITDA related to Uganda, Vietnam, which we sold during the year, we had NOK 200 million of retroactive payments for tariff adjustments in the Philippines and Pakistan. In this year, we expect reduced EBITDA from Ukraine due to the repair of one of our plants and lower payment levels for the remainder of the portfolio in the country. Lower EBITDA from the Philippines and Laos due to the normal hydrology expected compared to the high levels we saw in 2025. These effects will be partly offset by contributions from new projects that are starting operations during the year and other operational improvements. For the first quarter, we expect that total Power Production between 950 and 1,050 gigawatt hours. EBITDA in the Philippines of NOK 180 million to NOK 240 million based on the normal hydrology and strong contributions from ancillary services. In our D&C segment, we have NOK 1.8 billion remaining contract value and a gross margin estimate of 10% to 12% on average across the portfolio of projects under construction. For corporate, we expect a full year EBITDA of NOK 125 million to NOK 135 million negative. And these estimates reflects a strong base of operating assets, high construction activity and healthy cost control. And by that, I invite you back, Terje, to take us through the summary.
Terje Pilskog: Thank you, Hans Jakob. So to sum up, 2025 was a very good year for Scatec. We've had good financial performance, high construction activity during the year. We have significantly increased our pipeline and backlog during the year, and we have also strengthened the balance sheet. I'd like to think that 2025 was a transformative year for Scatec. We also launched our new targets and our strategic priorities during our Q3 presentation. And in 2026, in line with this, we will focus on strong operational performance, execution of our significant growth portfolio, divestment of noncore assets and also take further steps in terms of deleveraging our corporate balance sheet. I think it's going to be a very exciting and a very active and hectic year. Thank you very much. And now we will move to questions.
Andreas Austrell: Thank you, Terje and Hans Jakob. Over to the Q&A. We will as usual, start with the audience in the room, and then we will take some online questions. So if you want to ask a question, just raise your hand.
Unknown Analyst: [ Andreas Obst ], SEB. In your guidance for 2026 on Power Production, you provided some soft comments about the changes in Ukraine, but could you be more explicit on how much the contribution in Ukraine is expected to be compared with 2025 levels, some rough indication?
Hans Jakob Hegge: Yes. I think in one of Terje's graphs, he showed the impact in the fourth quarter last year of NOK 67 million. I think it's also in the fact sheet. Looking at the outlook as Terje said, the team is working incredibly hard to reinstall the capacity and is anticipated to take until summer. And we haven't provided a figure, but ballpark around NOK 100 million.
Unknown Analyst: Okay. So -- but you also made a comment about which I've interpreted as somewhat lower payments from you...
Hans Jakob Hegge: Lower payment levels, that Terje is very much aware of. And as the rest of us, we have basically had very higher-than-expected payment levels last year. So starting the year with a more cautious approach to more normal as expected payment levels is a fair assumption.
Unknown Analyst: So if I just to summarize, the base line should be somewhat lower and roughly NOK 100 million below the baseline for the first half.
Hans Jakob Hegge: Yes.
Unknown Analyst: Okay. I have another question as well, if I may. In the Development & Construction segment, I appreciate that you're progressing projects and are trying to sustain activity also in the first half, but there are some financial closures, which needs to be in place for that to happen. How should we think about the first half in D&C upon completion of the projects currently under construction, the NOK 1.8 billion?
Terje Pilskog: Your question is what is going to come potentially in addition to...
Unknown Analyst: Yes, or how quickly, is that a second half event? Or are you still comfortable with the commencement of construction, as you indicated in the past, during the first half of...
Terje Pilskog: Yes. I mean we're typically not commenting on specific dates or exactly sort of when the projects in our backlog are going to come into financial close and start of construction. But we see that sort of across the backlog that we currently have. There are also some projects that we anticipate will come into construction -- reach financial close and coming into construction in the first half of the year.
Andreas Nygard: Andreas Nygard, Nordea. You have huge projects now going on in Egypt. Should we assume that you can continue to originate to 2 to 3 gigawatts of projects annually in Egypt?
Terje Pilskog: I think now -- I mean, as we went through here, we now have 5 significant projects in Egypt that we're going to focus on securing financing, bringing in investors, bringing to financial close and start construction during this year. And I think that's going to be a main priority for the year. There's still significant more opportunities in Egypt related to renewable energy. Renewable energy makes sense in Egypt. It's basically saving costs related to the alternative sources of power generation. So -- and Egypt is trying to accelerate their program for reaching their targets when it comes to renewable energy in the power mix. They had certain targets. I think it's 42% by 2035. They took it back to 2030, and now they're trying to reach it even earlier. So in that context and based on our position in Egypt, we see more opportunities in Egypt.
Andreas Nygard: Okay. That's very clear and very nice to hear. But this scale of projects, could you find it outside of Egypt? Or is Egypt quite special right now in terms of the scale of the projects? Could you see 2 gigawatt projects in South Africa, for instance?
Terje Pilskog: Yes. I do think you could also see projects at that scale also in South Africa. But obviously, it also depends a bit on how the regulations are developing. But I think as the power sector also in South Africa will continue to be deregulated, we will also see more opportunities to do corporate PPAs and to build out large portfolio of projects that can basically sell energy to more corporate offtakers. So I think that's a development that we will see. And then we will obviously look for developing large clusters of projects also in South Africa. So there is also potential for larger projects in South Africa.
Andreas Nygard: So in summary, the activity level you're expecting in '26 and '27, that run rate could likely just continue in '28, '29 and for eternity?
Terje Pilskog: Let me answer your question like this. I continue -- or we continue to see that renewable energy becomes more and more competitive in the markets where we operate. With batteries, it becomes more flexible. It can provide baseload green power. And in many of the markets where we operate, we are -- the countries are, in principle, saving money, reducing alternative cost of power generation from implementing renewables. So I don't see a reason why the current pace in the industry is not going to continue. And I think based on everything that we are currently doing and the track record, capabilities of the organization that we have, I think that we are in a good position to capture part of that growth.
Andreas Austrell: We have a couple of questions from our online listeners as well. We can start with Jørgen Lande from Danske Bank. In terms of recent movements in input costs like silver and copper, can you comment on how this potentially has impacted the progress of reaching FID?
Terje Pilskog: I think there's a couple of things happening in the industry. Some component prices are going up. The VAT rebate in China has been removed or is being removed over time related to panels and batteries. On the other side, we also see that other components that we are using, we are able to achieve savings. And the things that are happening in this industry is obviously not -- it doesn't come as a surprise to us. So we don't see that any of these things that are happening in the industry will have any significant impact on where we will be able to reach FID and take financial close and start construction of the projects that we currently have in the backlog. We will obviously continue to be very disciplined in terms of our hurdle rates, in terms of making sure that all the projects that we are doing are value creating for us and our shareholders. But based on what we are currently seeing, we see that sort of the changes in the industry is manageable and not also surprising.
Andreas Austrell: Thank you. One question from Helene Brondbo from DNB Carnegie. Can you shed some more light on the status of your ongoing asset rotation program?
Hans Jakob Hegge: Yes. That's the one we are not sharing a lot of detail on announcing transactions. What we have said is, of course, that we have clear ambitious targets, another NOK 3.4 billion proceeds to 2030. This is within a time frame, which should be manageable and its main focus on the noncore. It's also reaching certain ownership stakes deliberately on project carefully timed. So we have discussions ongoing and we are in terms of our long-term plan according to plan.
Andreas Austrell: Thank you. Helene also asked about the input costs. I think we have covered that. Another one from Helene, to what extent can we expect the solid D&C gross margin in Q4 to be repeated?
Terje Pilskog: Yes. Here, I mean, we have commented on that in our outlook, and we're saying that with regards to the NOK 1.8 billion that we have remaining in construction revenues or contracts, we are expecting and we are indicating that we will continue to reach in the range of 10% to 12% gross margin of those contracts.
Andreas Austrell: Thank you. Another one from Jørgen Lande, Danske Bank. You guide 2026 Power Production to a midpoint of 5.4 terawatt hours, which is higher than the midpoint of consensus while EBITDA implies a very softer margin. Can you comment on how you think about our Power Production EBITDA in 2026?
Hans Jakob Hegge: Yes. So I understand -- I think I understand at least where Jørgen is coming from. So is there a misalignment on the EBITDA side, and it has to do with the composition of the contribution. So I think we have to stick to the guiding that we have provided today and NOK 3.8 billion to NOK 4.1 billion is explained also in contrast to last year, the one-offs, any divestments is, of course, a potential deviation but also the impact on the pace of the new projects coming in. And I think it feels at least a bit special for us taking the development into account Kenhardt and then doubling to Obelisk and then we have Energy Valley. But we're not pre-announcing anything. We just signed a PPA, but we are working very hard to mature this project, and that is, of course, a significant potential contribution. How this is forecasted? I think we have to stick to professional secrets.
Andreas Austrell: Thank you. We have some questions from Anis Zgaya from ODDO BHF, one on Ukraine. I think we covered that one. Another one on the Philippines, you show a sustained contribution from ancillary services and a favorable water fee settlement in 2025. How should we think about AS, ancillary services pricing and volumes in 2026 versus 2025? And what's your assumption for hydrology normalization embedded in the guidance?
Terje Pilskog: I think when it comes to the ancillary services market, there are 2 elements of the ancillary services revenues that we are currently generating. It's partly related to a contract that was secured a couple of years ago, where we have very predictable revenues. And that contract is representing maybe around 50% of the volumes that we are typically seeing in that segment. And in general, when it comes to the pricing, on a short medium-term basis, I mean, it's very difficult to provide input and outlook in terms of prices, but we don't see a reason on a short medium-term basis that the prices in the ancillary services market is going to change.
Hans Jakob Hegge: Yes. And on normal hydrology, it's just that when you use these data for up to 10-year period, you see variations. And last year, I think we agreed that it was above normal hydrology. And it's a bit hard to start the year without normal hydrology as an assumption. So that's where we start off, just being transparent about the relative change.
Terje Pilskog: And obviously, the interesting thing when it comes to the Philippines now is that we have 2 new projects, 2 new battery storage projects that are in construction and that we are anticipating to reach financial COD in the first half of this year, and that is increasing our capacity related to battery storage from 24 megawatts to 80 megawatts in the country, so a tripling of capacity that comes into operation first half this year that enables us to increase our participation in the ancillary services market. And then on top of that, we are also intending to move more projects. We have more projects in backlog also related to battery storage, but we will also aim to move into financial close and start of construction also relatively soon, and that will further then increase our capacity on the ancillary services market and increasing our flexibility in the Philippines and increasing our ability to tap into several revenue streams, as I talked about in the commentary.
Hans Jakob Hegge: I just flip to the slide that you showed how significant ancillary services has been sustained over several quarters. So with the ramp-up of battery capacity, it's even more robustified.
Andreas Austrell: One follow-up on your Ukraine. Any insurance recoveries or compensation mechanisms you can detail?
Terje Pilskog: No, currently in the current situation in Ukraine, and we have to remember that the war is soon entering its fifth year. It's not really possible to get insurance, which is going to cover these kinds of events in Ukraine.
Andreas Austrell: Okay. Quite a lot of questions today. Just I think, 2 more. Lars Christensen, Fearnley Securities. Congratulations on the strong results. For the Energy Valley project in Egypt, should we expect any asset rotation to help fund the investment?
Terje Pilskog: As we said, we are continuing to work on our divestment program, and we will continue to work on optimizing our portfolio over time and have a very active perspective on our portfolio. And then we also, in previous presentations, discussed the fact that we will, in certain projects, also go down in ownership stakes through a layered structure, where we are still able to maintain control over the project, but to take down our direct equity investment into the project and through that, manage also the capital investments over time.
Andreas Austrell: Okay. I think we'll take just one last question. Do you see any problems of the power grid in any of your countries you have -- where you have large projects? And how do you solve these problems?
Terje Pilskog: It is clear that sort of with the increased penetration of renewables, especially intermittent renewables, there are situations, I think in all grids, in all countries, where, you will have temporary challenges with the grid that will either have to be managed through strengthening the grid over time or also with the addition of storage capacity and batteries. And there, I would like to draw the attention to Energy Valley projects. It's 3 installations, 2 pure battery installations at 2 different locations and 1 hybrid facility. And obviously, those stand-alone battery installations, they are put where they are in order to help balance the grid and mitigate those types of concerns in those situations. Similarly, same thing is happening in South Africa, where we are now building one stand-alone battery project and where we have another one in our backlog. And these batteries are obviously also put into places where they help balance the grid and mitigate the challenges that will, in certain places, come into the grid. So this is an important part of our business going forward. We have to be very -- we have to be on top of the grid situation in the markets where we operate and make sure that we focus on the areas where there is grid capacity and where we will be able to implement new renewable energy projects and deliver the energy onto the grid.
Andreas Austrell: Thank you, Terje and Hans Jakob. One more from Andreas, SEB?
Unknown Analyst: Just a final question on asset rotation, the NOK 3.4 billion when you refer to asset rotation, that relates to projects already in operation as of today, right?
Terje Pilskog: That's correct.
Andreas Austrell: One more from Andreas, Nordea.
Andreas Nygard: So just the last one on your investment target, NOK 1 billion of equity annually. The Energy Valley project, I guess, you will structure it perhaps the same way you're doing Obelisk, aiming for an equity bridge perhaps. The way you're seeing your backlog now, are you actually using the full of your NOK 1 billion equity injection capacity the way you're looking to structure that backlog?
Terje Pilskog: I think Terje will fight to answer that question, do you want to go? Okay. Under construction and in backlog, there is equity around NOK 3 billion, and that is excluding Energy Valley. So Energy Valley is sizable as you could imagine. And we will come back to more granularity on the project as it is progressing, but we are well underway to reach our target and the guiding from the strategy update. That's basically directionally what I would like to say. But under construction and backlog is around NOK 3 billion equity.
Andreas Nygard: And will that be cash?
Hans Jakob Hegge: We haven't provided super detailed analysis of this today, and I think we will come back to it. But I read your question, Andreas, is this in line with what you said you would inject of equity. And I think we are fairly aligned what we have on the plate as is.
Andreas Austrell: Okay. With that, I think we say thank you to everyone and end today's presentation. Thank you.
Terje Pilskog: Thank you very much.