Good morning. Welcome to the Greencoat Renewables 2025 Full -Year Results and Capital Allocation Update. I will now hand over to Paul O'Donnell. Please go ahead.
Good morning, everybody, and welcome to the 2026, Greencoat Renewables results. We've had a busier than usual set of announcements this morning, as I'm sure you've noticed. Where alongside our full year results, this has also been accompanied by a share buyback announcement. In addition to that, we've announced the investment into a new green energy data center platform, which we've launched. What we'd like to do this morning, is to initially present you with an overview of the full- year results. We'll then move on and provide some context into our updated capital allocation strategy. Then we'll proceed to give you some further background and details on some of the value accretive growth initiatives, that we've announced this morning, including the data center platform.
With that, I'll hand over to Bertrand to take us through both the 2025 financial results and to give us some context on the capital allocation. Thanks, Bertrand.
Thanks, Paul. Good morning, all. Let's dive straight into the financial performance for the business for 2025 on slide five. We are presenting here the consolidated cash P&L for the group and its consolidated balance sheet. As we discussed, previously, 2025 have suffered from low generation. Over 70% was driven by low wind speed. H1 was particularly affected with -15% and H2 partially recovering at -6% versus budget. In terms of revenue, 2025 was EUR 61 million down versus 2024. Three driver, a number of those were expecting/plan, EUR -34 million due to evolution of the geographical and tariff mix. As an example, German offshore transitioning out from its high tariff. EUR -21 million from non-recurring compensation revenue for 2023 capture in 2024.
Some change of perimeter, given the sale of the Irish portfolio asset in 2025. However, revenue remain highly contracted with more than 80%. In appendix, you will see a detailed breakdown of the revenue mix. Ireland, which is 95% contracted, remain our largest market, accounting for more than 50% of our revenue, while Spain and Sweden, which are pure merchant market we're operating in, accounting only for 7% of the revenue. In spite of low generation, the net cash generation remains solid with EUR 115 million underpinning a 1.5x net dividend cover. Finally, EBITDA stood at EUR 158 million. On slide seven, slide six, sorry. Three key messages here.
One, you can see the profile of the dividend cover that the existing portfolio is able to sustain. As you can see on the right of the table, averaging 1.6x over the next five years. You may ask, and I'm sure some question might come from the drop in 2026 at 1.2x. The drop reflects the low price future as of December. Since then, we all picked up that price curve for certainly for 2026 are steeply going up with what is happening in the Middle East and not reflecting to those metrics. Second message is the level of contracted revenue of the portfolio, 76% over the next five years and well within our strategy targets.
The third point to indicate is that the portfolio generating circa EUR 600 million of cash pre-dividend payment over the next five years. Moving on to slide seven. Here we are showing the NAV bridge from December 2024 to December 2025. Again, as we've communicated previously, NAV per share declined 9.9% or EUR 0.105 over the period, mostly driven by, one, a revision of the P50 of the portfolio, where we completed our review for more than half of the portfolio of generation volume. This resulted into a negative EUR 0.057 NAV impact. Two, the power price short-term decline I referred to, which resulted in EUR 0.043 per share.
In spite of the low generation, volume-wise, cash yield was 11% on closing NAV, underpinning the 1.6x gross cash dividend cover. Moving to Slide 8. Slide 8 breaks down the capital allocation for the business in 2025. As you can see on the left-hand side of the slide, gross generation was EUR 122 million, supplemented with EUR 137 million of cash proceed from the Irish portfolio, which crystallized in 2025, which we sold at 4% premium to NAV. This funded EUR 176 million dividend, which was EUR 0.069 yield on NAV or 9.9% yield on share price at December 2, a debt reduction of EUR 149 million.
Three, the residual increase in cash balances by EUR 31 million. In parallel, we completed the acquisition of Andella, which was our last sales forward acquisition, a Spanish wind farm from EUR 91 million, which was fully funded by debt. Paul indicated, we'll talk later about our capital allocation strategy for 2026 and beyond as we are taking immediate steps to materially increase return for shareholder. Next slide nine. It's about debt and debt structure. The group continued to benefit from a cost, I will say, highly cost-effective debt structure. Blended cost of debt is 3.4% as we speak. Interestingly, we refinance our October 2025 term loan of EUR 275 million, which was extended to 2030, so five year ahead, at a 3.9% fixed rate.
This is well below our long-term normalized target of 4.7%, and the debt is largely fixed rate at 89%. Next maturity, you can see the maturity profile in the bar chart. Next maturity of EUR 275 million is coming due in March 2027. As we executed in 2025, we are engaging with our banks to roll over for 5 year for the maturity. Finally, of the cash balance of EUR 138 million, EUR 90 million is unrestricted, meaning available on short notice. The residual amount, which we call, qualify as restricted cash, is held in JV structure with the specific distribution cycles. Available cash, but at different point in time. Now, let's move looking forward, on the capital allocation and strategic framework section, on slide 11.
During 2025, the board and we as management have challenged ourself all to revisit our strategy and our capital allocation framework. There were two main question we asked ourself. On one hand, how can we respond from a business perspective to the challenging market environment the asset class and ourselves have been facing? On the other hand, how can we capitalize on our market position and our EUR 2.1 billion portfolio to materially increase the return and the cash the business can generate over the mid to long term without compromising on its risk profile? I'm going to take you through to our plan, but before doing this, there were three strategic goals we wanted to achieve. One, narrow the discount to NAV with an immediate actions of scale. Two, deploy capital into value accretive growth opportunities.
I think it's important to outline what do we mean when we talk about growth. We are looking at ways to increase the return on equity the business generates, and it's all about growth of the EPS de facto. Third, maintain an attractive dividend. Let's move to slide 12 to see how does it translate into practice. From this point on, I would like to put a disclaimer up. We appreciate there is a lot we want to take you through, so let me first take an helicopter view of what we want to achieve. The strategy we define ourself to ourself is a two-pronged approach. One is over the next 12 months, it is about prioritizing return to capital to shareholders with the immediate launch of a buyback program and deleveraging of scale.
In parallel to this, kicking off a disposal program of EUR 300 million-EUR 400 million to supplement organic cash. In parallel to this, it positions the business to be able to invest into value accretive opportunities, which are centered across three streams. Delivery premium return to our current return on equity, which is currently sitting at 9%+ on NAV, and to be a premium returns to buyback. The capital deployment on those four to six initiative will be at a later stage in the five-year plan.
What I'm planning to do next, over the next four slides, is describe to you what each of our initiatives entail, touch upon the returns each of those initiatives will deliver, and give you an indication of the capital we are planning to allocate to each, and critically, how we have planned to sell fund those. Moving to next slide, let me take you through the first dimension of our capital allocation, three streams here. One, buyback. EUR 100 million program, which would be close to 15% of our outstanding shares. This is starting now, and you may have picked up in the announcement, and it's going to be funded by organic cash to start with. Two, deleveraging. We signaled that our intention was to reduce gearing to circa 45% from current 52%.
Our plan is to accelerate this so that in the course of 2027, we will hit this level. Question you might ask is: Why mid-40s level? This is to give us flexibility in terms of future investments, as well as further strengthening the resilience of our dividend cover. The velocity to deliver those two initiatives is linked to our timetable to deliver our phase one disposal program, we'll come back to this, which focus on merchant assets and aims at releasing EUR 300 million-EUR 400 million of proceeds. It's all about execution. We have a good track record in terms of executing with over EUR 200 million of disposal at premium to NAV across two geographies. I think it's quite helpful in our current market dynamic, which remain, I would say challenging M&A market that we have a pan-European portfolio.
We are not dependent on a single geography dynamic. For information, we have already kicked off this, and we'll keep you update on progress. The last stream is continue to deliver dividend, which we see as currently adequate at 7% dividend yield on NAV or 10% on share price. Before I introduce each of the three value accretive growth initiative you see on the slide, I think it's useful to say that those opportunities have been on our radar for a while, and we are capitalizing either from the embedded value of the existing portfolio or from the relationships and the leading market position we have in the Irish market. Those three opportunities are pieces of the same puzzle as well as our existing portfolio. If you think about it, the energy transition ecosystem has been a puzzle which became more complex.
As a business, we like complexity because it creates premium return opportunities. Now we strongly believe it is the time to position ourselves to take benefit from the value accretion we see by putting those pieces together. In concrete terms, it's boost return on equity that the business can deliver without compromising on the risk profile. Three sets of initiatives you see here, and Paul is going to touch upon in more detail, but to give you some description on what they are. First one is hybridization strategy, something we talked about in the past. This is about as simple as adding to our wind sites, battery and/or storage solar capacity. This allows us to capture development premium, but on asset with reduced CapEx and de-risk because we know those assets and they have been operating.
We can accelerate the development cycle as we benefited from the existing green infrastructure. We believe that this generates IRR in excess of 13% or return on equity 500 basis points above our current portfolio. Third piece, green digital infrastructure. You might have picked up this morning that GRP has announced the launch of a digital platform, 50% co-owned by GRP. This is building on the convergence of digital and power, where power is an absolutely requirement to unlock data center sites with a green energy solution behind them. This is where GRP comes. This will be a capital light model for GRP, where the platform will develop site and equip them with corporate PPA. The return will be in excess of 3x or IRR of 20%-40% up.
The last piece of the puzzle is invested into a new asset, but secure access to them at an earlier stage. This piece fits very well with the green digital infra play, as this enable GRP to generate superior returns on renewable assets by linking them to the data centers' hungry need for green power. In a nutshell, this will allow us to capture in excess of 200 basis points return to our current asset profile by capturing development premium, having secure premium pricing for those corporate PPAs. You've picked up that we have contracted those in our existing portfolio at premium pricing to what prevalent market price. Some of those corporate PPAs, we could also link them in addition to our existing to those new asset into our existing or co-located sites.
Again, Paul will give you more flavor of what it means. Next slide, please. Slide 15. From a business perspective, I mean, going beyond the strategic and turn this into reality, what was critical to us was to ensure that we could execute our plan on a self-funded basis. If the equity capital market reopens, this would be a luxury problem as we can see more opportunities that we are planning to execute upon. The sources and uses table on the right shows you the quantum of capital we are planning to allocate to each of those initiative over the five, next five years. You see on the left side of the slide, the timeline of the capital deployment by initiative. As I told you, the buyback and de-leveraging are concentrating over the next 12 - 18 months.
The value accretive growth initiatives will deploy capital in scale as of 2028, 2029, which correspond to their development and build cycle. Whilst in the short term, we are building the position in those areas at moderate development cost. From a source of capital, the left column in the sources and uses table, the funding will be coming from organic cash and from a two-phase disposal program. Phase I, EUR 300 million-EUR 400 million of disposal aiming at deleveraging and scaling the buyback. Phase II, similar amount, which has been labeled recycling in purpose as it is to reinvest into higher return on equity asset. The critical foundation of the funding plan are, one, it to be self-funded, and two, to retain a moderate gearing level of 45%.
To close off on this overview, page 16, those are showing you what are the way we see the KPI of success to reposition the portfolio so that we are boosting the return equity of the business by more than 200 basis points on a self-funded basis by rotating portion of our assets and to increase our long-term contracted revenue mix too, and diversify the revenue mix at the same time. This will translate into cash generation per share, increasing by more than 40% versus status quo. With this in mind, I'm passing it over to Paul, who will focus on the first steps we have taken in our value accretive growth initiatives.
Thank you, Bertrand. Just as we turn into this next section and just to kind of set the scene again as Bertrand did through the, through the understanding the different value accretive options we have. There are three new developments to discuss here across hybridization, green energy data centers, and then long-term value accretive development opportunities. We see significant synergies across the three strategies, and we believe that this growth story links to exactly where today the Irish market is going, but more broadly, where the European energy market will move to over the next number of years. As I turn to slide 18, I'd like to start off by just giving a bit of context against the hybridization strategy we are now implementing.
For those less familiar with the, with the term or the, what the opportunity is, really, this is the co-location of battery and solar into our existing portfolio. We've come to this opportunity after having spent the last three years owning and operating our own battery storage assets in Ireland, then really filtering through our full portfolio to identify 10 new sites. From a team perspective, at Schroders Greencoat here, we have a very strategic partnership with the Chinese battery technology company, CATL, which we think gives us a very strong opportunity to lead the way in, particularly in the storage space. As Bertrand touched upon, we're taking a measured step in terms of how we want to unlock this opportunity, so the focus initially will be around development capital.
Finally, again, the concept of all growth, value accretive growth. We see the incremental returns for that we're able to invest into offering about 13% unlevered IRR, so premium returns and unlocking the value in our portfolio. As we turn the page to slide 19, why Ireland and why is the opportunity now? I think firstly, you know, what we see today in Ireland is there is the opportunity to unlock incremental revenues by combining storage, wind, and solar together. We're seeing the opportunity to trade power and storage today. We see the balancing market opening up, and we see over time, you know, the opportunity now to potentially to use the existing grid capacity that's not currently being used across wind and solar and optimize that grid.
From a synergy perspective, and as we to touch on data centers in a minute, one of the key opportunities also is that by adding new capacity to our existing sites, that will support the additionality requirements that corporates will have by ensuring there's new investment and it's unlocking new capacity onto the grid. Finally, we own our own sites today. You know, we have access, we have permanent access to the grid there, we've accelerated development timetables. All of this is about transforming our assets into higher value, co-located battery or storage sites with minimal additional risk. What have we learned, I guess, over the last 3 -4 years? You see on slide 20, the case study at Killala.
We took the decision to make the investment in 2019, over the following 2-3 years, we brought the project through to late-stage development, construction, and into full operational phase. The project has worked very well from a learning perspective. You can see the very attractive cash yields we've had in the last three years, delivering above expected project investment levels and double-digit unlevered IRORs. Most importantly, we've seen how the trading strategy and how those different incremental revenues work and when it sits alongside a wind farm and is able to play in a more active traded power market, which is how we see the power markets moving to today in Ireland.
That investment, as we turn the page, is really what's underpinned our decision to really step forward and to unlock the development opportunities that we see across our own assets. You can see a pipeline of roughly 330-340 megawatts that we see can be unlocked from our own portfolio. Approximately 175 megawatts of this relates to co-locating storage on our wind sites, then about 160 megawatts of that relates to co-locating solar on our existing sites. Again, to visualize that, what we are going to be doing is securing land close to our existing sites, taking those projects to the development phase, ensuring we can get access to the grid, and securing a route to market for those projects.
We've given two examples on the right-hand side of sort of example projects that we are considering today. Project A refers to what we call a long-duration storage, and so really this is about starting to solve the grid's needs for longer storage when the wind doesn't blow or the sun doesn't shine. We see Ireland moving quickly to unlock that market, given the high levels of renewable penetration, and what that really means is having batteries that can run for 6-8 hours as opposed to the historic of 1-2 hours. In this case, we are busy unlocking this site at the moment, and we see, roughly speaking, EUR 750,000 to develop the project and get that ready for full investment.
In project B, what we are doing is essentially mixing a combination of solar and storage into an existing wind site. Again, we have spare grid capacity at the substation. We have very strong access to land in the area, we believe the policy is moving to support the sharing of grid over the medium term. The concept of developing this type of project now for such a case that one that emerges in the next one to two years will allow us to make that full investment decision, again, to build a more diversified revenue stack across wind, solar and BESS. When you combine all this together, it combines to about EUR 240 million of capital investment in between debt and equity.
As Bertrand talked about, we really see that being relevant towards the back end of the decade. Whereas the next two years is really all about delivery and execution of these development sites. Turning then to slide 22, and I guess what's a pretty significant announcement for us today, we're really excited and pleased to launch our new green digital infrastructure platform. This platform has been set up initially in Ireland and is essentially focused on powered land strategy to unlock sites for the hyperscalers and leverage the market dynamic that is there, where there's a need for renewable assets to power these data centers. The platform will be a standalone business with its own management team and one that we will co-fund alongside our private market colleagues in Schroders Greencoat.
We've made our first acquisition, I'll touch on that in a second, and we see this as a blueprint for how grid and customers are going to require data centers to be unlocked for them. As I'll touch upon in a minute, I think the decision, the policy set up in Ireland today has made it clear that renewables and digital will work hand in hand, and that without having access to significant amounts of renewables, it won't be possible to deliver that digital growth. I think finally, as Bertrand touched upon, we are employing a capital-light model. Today, our business is not about building and owning data centers, but it's about creating the value that will be in the development phase of these projects and capturing the ancillary benefit of delivering the renewables that these projects will also need.
Turning therefore to slide 23, just to give a bit further context on the market. The Irish market is unique in terms of its development stage and how developed it is in the European context. Ireland is the first European market to address the data center growth in a power-constrained backdrop. Ireland is unique in terms of the climate it has and its suitability for building data centers. It is the European headquarters for many of the global technology companies. It has a well-established ecosystem and infrastructure for data centers, and today, about 22% of all electricity is used in Ireland to power data centers.
There is, in addition to that, an expectation that there will be significant growth to come over the next 10 years, and that Ireland's renewable energy policy will sit alongside the opportunity to expand the data center sector. The growth is based on policy today that is very clear and will require it to be a power-first solution. What we mean by that is development is about power, not real estate. The policy that was announced recently in Ireland, the Climate Action Plan, has now created the certainty that is needed for this type of investment.
Really what that means is that we expect to see system-wide integration and the need for 80% renewable infrastructure to power these data centers, as well as understanding and providing the backup power that will be needed when the sun isn't there or the wind doesn't blow. We see this model solving the twin needs that hyperscalers have, which is having fast access to grid and also having a decarbonized strategy to power these data centers. On slide 24, we give a little bit more context as to how the market has changed. Really what I touched upon on the previous page, which was that, you know, we see this moving from being a real estate strategy to being an energy and a power strategy.
What that means is, in the past, the key development milestones were around securing land, securing access to fiber, and being located close to large population centers. What we see the next 10 years delivering is that in addition to that, we will need to have a significant access to renewable infrastructure. We will need to be able to connect into parts of the grids that are unconstrained, and there will need to be a deep understanding of energy storage and backup power to support the data centers and to not put further damages or requirements onto the grid.
Greencoat Renewables is very well-positioned to play that role of creating those of unlocking that value, and not just across our existing portfolio of renewable assets, but also our deep expertise across all parts of the energy transition space. Turning to slide 25, and to give a bit more context on our first project that we've announced this morning. This is a project called the Drogheda Energy Park, which is located about 40 kilometers north of Dublin. The site today is located on one of Ireland's largest, or previous largest, industrial sites, which produce both cement and magnesium. Part of the old industrial framework, large emitters of large emission producers and essentially, you know, not part of the future for Ireland's industrial strategy.
What this project has done is essentially to be repositioned as a data center, but to use and to benefit from the existing infrastructure that's on site, i.e., having access to grid, electricity grid, having access to gas grid, and being located right beside the water, so being able to positively use the water and from the sea. The team that we've put in place are there to develop out this site and to bring the project all the way through to ready-to-build stage. It's located in an area that has a mix of hyperscalers and existing digital infrastructure.
We see a strong opportunity to partner with the preexisting digital players and hyperscalers in the market and provide to them not just access to this type of site, but also help to source and secure the renewable power that would be needed for this type of asset. I think to link this all back together and the third part of what Bertrand touched on, which was on slide 26. As we take this strategy forward, and as we see the data center sites development increase, we see an opportunity to recycle out of some of our more merchant assets and to rotate into more contracted assets at a later stage. We expect to do so with strong visibility as to who the counterparties could be for those assets.
By having a significant data center pipeline, it will be important for us also to have access to new renewable power and to be able to partner with those technology companies at an earlier stage, which should help to both de-risk our route to market strategy, and by having bilateral strategies with them, allow us to, by taking that earlier stage risk, benefit from higher returns. We see this being a significant opportunity for reinvestment in the medium term as and when we start to see the data center strategies come online. With that, I might hand back to Bertrand to sum up and look forward to your questions. Thank you.
Thanks, Paul. Page 27. Let me thank you all for listening. We, again, as I said, we appreciate there's a lot to digest in an early morning breakfast. What I can tell you is that the board, the team, Paul and I have not left any stone unturned when we embark into this journey more than 12 months ago. We are firmly convinced that we have a solid and clear plan which redefines the path to shareholder value creation. We are clearly all behind it. We have absolutely clarity of thinking, and we have now 200% focused on execution because it's all about execution. With this in mind, let's turn to question. I suspect you will have some.
Thank you. Ladies and gentlemen, if you would like to ask a question, please press star one on your telephone keypad, and we'll pause for a brief moment. Thank you. We'll now take our first question from Conor Finn of Barclays. Your line is open. Please go ahead.
Morning, guys. two from me, please. firstly, on slide 15, you've outlined a range of sources and uses of cash. If we think about the growth CapEx that's earmarked for hybridization and data centers, you know, if capital availability does become a constraint, should we assume that data centers would take priority in this instance? secondly, in relation to the Drogheda asset specifically, you know, when you look at the market, how many sites are there like this in terms of, you know, access to grid power, you know, planning, certainly planning in place? you know, when you look across, say, maybe potentially competing assets on a similar timeframe, how many other are like this?
Hi, Conor. Let me take the first one. If the capital become constrained, I think it's not a matter of quantum, but it's more a matter of timing of this. If it was the case, it's we have not defined which initiative because it's a question about capital allocation, so we'll see how we can manage this. It's become, basically a day-to-day management decision. I think on a... The key point here is not the quantum so much, but it's the phasing of those and the sequencing of those.
Conor, I think, I mean, this is the second piece is how many sites are out there. I mean, this is where I think we are most excited about what we've been working on the last 12 months. We believe firmly we are ahead of the market on this. You know, when you look at the people who have sites, and have access to sites, there is a need for the skill set that Greencoat Renewables has created today. We believe that we, you know, there is a significant opportunity to partner with utilities, with industrial companies, with real estate companies, all of whom, you know, have some aspects of what it requires to unlock data center sites.
[audio distortion] that the development risk, the knowledge of what the customer is looking for, the access to the renewable power, the ability to source the backup power that's going to be needed, all of that creates a chance for us to build on what Greencoat has always done, which is create partnerships, create winning strategies, both from a capital access perspective, but also from a sourcing of sites perspective. You know, we see. Look, Ireland is very clearly in just the small Irish market alone, you know, Ireland is clearly open for business again, and it's clearly there's an appetite there to build a multi-gigawatt data center pipeline. We don't see a kind of constraint on the growth opportunity that exists here.
It's about executing what we've done, bringing the tech companies in as partners, and demonstrating that we can fully de-risk these sites and add value not just on our own pipeline, but potentially over time to other partners' pipelines as well who may wanna work with us.
If I may add some things also. I think, as Paul described, I mean, the depth of the market is there. It's a bit like when we were talking about how many wind farm can we access, et cetera. I mean, this is not a shortage of asset. I think what makes me particularly exciting about it when we started to think about data center is, and I cannot emphasize this enough, is the fact that as the largest access to renewable power, we are solving what is a bottleneck for those big tech companies and which we have already contracted power with. Because of the market position we have in Ireland, I won't be able to tell you the same, the same level of conviction on other market.
Doesn't mean that those opportunity doesn't exist. In Ireland particularly, because of what we are, what we have, and what we have access to, this, I would not put at ease, but would facilitate a lot the unlocking for the tech companies, the buildings, those data center, which has, was a constraint. It was constraint.
Yeah. We could go on on this, Conor, but we'd get very excited.
Next one.
Thank you. We'll now take our next question from Alex Wheeler of RBC. Your line is open. Please go ahead.
Morning. Thanks for the presentation. Three from me, please. Just the first one. Can you talk about the disposal process, the first phase and how you see the market for selling assets? Then I guess on that point as well, should we consider merchant assets as the focus there? If so, is it right to think that the disposals there would have a positive impact on the contracted mix alongside the gearing? My second question is on the new investment platform. Can you just give a little bit more detail on in terms of the first investment on the journey that that project will now go through, in terms of the, you know, the step-by-step?
I know you've talked about being capital light, or in the next couple of years on that side of things, but could you take more projects into the platform early on? Just a sense of the timing there would be great. A very last one, just on the evolution of demand and pricing. You talk about the opportunity to capture premium pricing on PPAs.
Clearly we've got this, you know, this big demand growth coming through in Ireland, and I'd be interested to understand, you know, how you're thinking about that in terms of the impact that may have on pricing, the market prices overall, and whether we should be thinking about the premium pricing of PPAs being on top of a market where the pricing dynamic is already going to improve. Thank you.
Thanks, Alex. I'm gonna start with the, just giving you a bit step-by-step on where we are on Drogheda, and then we'll pick up on disposals and back to premium pricing. I mean, the project is well through its development phase. I mean, you know, consenting and, you know, securing land. It has secured the land. We own the site. You know, the project has been in planning for a number of years. It has got full local support, cross-community support in terms of political, local organizations, council, et cetera, and has secured planning from the local council.
It's working its way through what is the higher body of planning approvals at this stage because it is typical for these projects to be taken to a higher body approval for appeal. Our expectation is that, once we have that final planning, we then need to secure final access to the grid. It is a milestone to have full planning before you can get your final grid connection offer.
Part of that will then be in demonstrating to the grid and the regulator that we have access to the renewable power that will be needed to be needed to power that asset, and also having access to standby power generation, which will be required as well when the grid has less power on the system on any given day. Those are all development stages we need to go through to secure the final stages of the grid to secure the renewable infrastructure that we will want to use to power that and to secure some standby generation. We have our own team. It's not led by Bertrand or myself day-to-day.
We've put a very experienced infrastructure team in place and digital team in place that have delivered many infrastructure projects across Ireland to do that for us. We expect that timetable to take, you know, they're between 2-3, 2-4 years in total. There are some uncertainties as to exactly when the planning piece will come through. All the way through that, we're working on the tenant side to make sure the project that we're wanting to deliver is suitable for a large hyperscaler and that they are, we're designing in line with what their expectations are. Therefore, our base case plan would be then that we sell the project as a ready-to-build, fully developed asset that the hyperscaler or their funders can step in and then own and finance on a long-term basis.
That's the timetable of that will be somewhere between two to four years. In terms of other assets, there are clearly multiple assets that we can then target along that are similar to that, and they will all face similar types of development risks. Can we secure the planning? Do we think the grid infrastructure is strong enough locally? Do we think the location is the right location relative to where new infrastructure is getting built in Ireland? Are they the right type of locations for hyperscalers? That today is not about, you know, that mapping those aspects out. Today is really about just demonstrating Drogheda, getting that to the right phase, and I think we would hope to then come back and be able to continue to demonstrate the growth opportunity over time.
Let me pick it up on the disposal process. Well, it's still a difficult market when you are selling asset. I mean, the many dynamic is what it is in the market. Having said that is to be, should I say, smart about which asset do you select vis-à-vis the market dynamics, which is the way we have approached to disposal. We apply the same recipe, I would say. The other piece of the equation is that we have the luxury of being present across a number of markets, so you are not tied up to the specific constraint or the dynamic of a single market. I would say, and you know, we are quite cautious when we engage in this kind of process.
I cannot disclose too much, but we've taken already steps to progress this program. In terms of the selection of assets, I mean, your logic is the same that we applied. We are targeting merchant asset, consistent with us focusing on contracted mix. The mechanical impact, as you pointed out, will be that the contracted mix of the business will continue to go up.
I think just to pick up your last point, like I think what's very interesting about the Irish market is that by essentially having a policy that links renewables to new build of data centers, you're inextricably creating a new demand for renewable energy. You know that it's one of the first markets where we're now seeing, you know, an active government auction policy in terms of the different RES auctions that are happening, alongside a very significant demand from corporates, you know, to make sure they can roll out their projects.
What I whether, you know, we believe that creates an environment for premium pricing, less competitive, tension in terms of on the downside, you know, and an opportunity to step in a little bit earlier and to capture some of that value that is going to be, at play for the tech companies who are gonna need this power. Next question.
That's clear. Thank you.
Thank you. We'll now take our next question from Kate Nurse of Davy. Please go ahead. Your line is open.
Hi. Good morning. Two questions for me, please, if that's okay. Just firstly a follow-up on the green digital infrastructure platform. Could you talk to us a bit more again about what CapEx light means exactly? Like which elements are you funding versus the hyperscaler tenant? Then I guess on the flip side, what are the different revenue streams for GRP from a park like this?
Yeah.
My second question is just looking at slide eight. You've helpfully given the dividend cover outlook profile, and if I heard you correctly, this is based off the existing portfolio. I just wanted to ask, what are the moving parts behind this pathway, especially in terms of accelerating out to 2 x covered by 2030? Thank you.
Yeah. Kate, I mean, the just a typical site, we think, you know, depending on its size, you know, the cost of land, like the development cost of a site could be anywhere from, say, EUR 25 million-EUR 40 million. You know, by the time you have taken a project, acquired the land, taken the project through planning, you know, delivered the sort of pre-works that will be needed to get access to the grid, put down grid deposits, et cetera, et cetera. All of those are non-CapEx items in my mind associated with the building of the data center, you know, which can run to billions of euros. When you think about the end-to-end development phase costs of these type of projects, it's order of magnitude much smaller, and that's why we talk about CapEx light.
There's always...e ach project will be slightly different. Some projects we'll buy the land, some projects we may option the land, some projects we may co-develop with partners. We may not have 100% of the development phase to incur ourself. A, you know, a rule of thumb is, I don't know, EUR 25 million-EUR 40 million as a sort of development phase, including the costs of the team ourselves that we have in place to basically, you know, to manage that risk and to essentially bring the tenant and their requirements to the table.
Good morning, Kate. On slide eight, on the dividend cover, you're correct. try to be specific on the fine print of whether this is the existing portfolio excluding the impact of the plan. Yes. This comment, a longer conversation on all the different bits and pieces move on. If you were to factor phase one execution, which is disposing of EUR 300 million-EUR 400 million, executing the buyback and the deleveraging, and the first phase of our development, moderate investment on the growth opportunities, the dividend cover will be fairly slightly up in the very short term. If you target some of those merchant assets, this is the impact of it, given low forward pricing in the short term.
If you look over the period, dividend cover, is consistent with what you see on the slide, plus or minus 0.1x.
That's helpful. Thank you. Thank you. We'll now take our next question from Iain Scouller of [Stifel]. Your line is open. Please go ahead.
Hey, good morning. Just coming back on the potential sales. I mean, where have you actually got to on the sales process? Any specific geographies that you are keen to exit from?
Good morning, Ian. I mean, it's a good question, but I'm a bit restricted with what I can tell you given those are live engagements. I think the way I will answer to your question is what I said to Alex, I think it was to Alex, is the filter we are applying to select asset we see prone to disposal are asset which are heavily merchant at this point in time. The double benefit is that, one, it's releasing three benefit. One, it's releasing capital. Two, it's an active way to manage the contracted mix of the portfolio by increasing the contracted curve.
Three, we see that there is a strategic demand from a merchant asset coming from a strategic player like local utilities, which some of them. This has been the dynamic underpinning our Finnish disposal, which have see an appetite are short on those type of capacity vis-a-vis their own trading arms.
Okay. Thank you.
Thank you. We have no further questions on the line. I'll now hand over for webcast questions.
Thank you. We do have a few questions that have come in. Some have already been answered, and I know we're relatively short on time, so I'll select some new questions here. Two questions around the buyback. Firstly, is your buyback dependent on market price? Is there a level where you would redirect that capital to other uses, sorry? Secondly, you're positioning the buyback as a program to reduce the discount to NAV. Can you provide a bit more detail on how you intend to execute it in terms of expected pace, triggers for acceleration or pause, and how it interacts with your deleveraging objectives?
Thanks. Let me take this one. On the mechanics associated to the EUR 100 million, you're correct. This will be the trigger point on pricing will affect how much we are going to deploy. I'm not going to comment on what is pricing because it's price sensitive vis-a-vis trading. By regulatory requirement, we are capped to buy up to 25% of the trading, the daily volume trading. In addition to... This is when you do it on an ongoing basis, which is the first phase of our buyback program, which for our funding, you may have picked up in one of the announcements.
We are releasing EUR 25 million of our getting cash to kick this off, which means that you are given the volume traded, it's a 4-6 months timeframe. In addition to this, we'll supplement and we'll scale to EUR 100 million on the basis of allocating some of the disposal proceeds into the buyback, and could take two forms. Either to do it the same way that we've been doing it or to do it via tender offer, whereby you do a much bigger buyback into the market. Decision will be made when we are approaching and market condition will dictate what it will be.
Very clear. A very specific question here. 2025 was a poor year for generation, why is the dividend cover expected to fall further again down to 1.2 in 2026?
Yes. I mean, it's two aspect. One, you have the full effect of the Irish portfolio disposal, which mechanically have reduced the portfolio cash generation. Two, this is a reduction of the forward, I mean, the merchant pricing for 2026, which was quite depressed because what has dictated the forecast of 1.2 was predicating on what was predict the forward pricing for merchant at end of December, which reached a low point. Since then, I will say pre Middle East crisis, the pricing in the market was up from a dividend cover perspective, which is further up with what we've noticed.
Moving on to batteries. Can you clarify how you intend to generate incremental revenues from the co-located batteries? Can you give an idea of the revenue stack you expect to capture across ancillary services, arbitrage capacity?
Yeah. Today already in our battery in Killala, you know, increasingly trading revenues are becoming a big part of it. There's essentially the ability to store power when power is low capacity at night, and then discharge it back during the day at high prices. That market is open. There is a big energy arbitrage opportunity, and we're seeing that come through day by day. In addition to that, there's opportunities to capture capacity contracts. There's opportunities to play in the auction-based ancillary services contracts, which are opening up on an auction basis, I think as of next year. Finally, you know, there's the balancing market revenues to play into as well.
There are a much broader set of revenues, I think, that will open up as part of having a mix of combined wind and solar, combined wind and storage or solar and storage. There's still some policy shifts required and steps required for that all to open up, including the sharing of grid capacity, and essentially aspects of that. That's why we're taking the steps now such that we have a more integrated set of assets as and when we see that policy shift coming there to allow us to access those.
Okay. One final question. You've outlined several sources of future value creation today, and they appear to materialize progressively. What concrete milestones should investors look for to build confidence in the delivery of this strategic shift?
Yeah. Look, I think, each of the business line or each of the business opportunities, I think, is about execution. You know, if we take Drogheda, you know, we look forward to coming back to the market and talking about the development phase, and the journey that we're on against that. You know, that will include, you know, each of the development milestones on the project, you know, progress with tenancy and how we expect the renewable infrastructure to feed into that. I think first and foremost it's important that we deliver that, you know, that sort of story to Drogheda, and it's well understood on the value creation by investors.
I think beyond that in digital, you know, one could expect that as we see similar opportunistic site opportunities, that we will continue to consider them. If we can see a similar value arbitrage as we can on Drogheda, you know, that's something we can do to expand the growth of Drogheda and our pipeline to outstand the growth of that platform in the Irish market. On other areas like hybridization, I think, you know, we will be able to again report back on KPI sites submitted into planning, you know, other projects ready for planning, pipeline development. I think that will become an increasing part to how we describe the value and the asset management part of what we do day- to -day.
Finally, in terms of looking more to the medium term around sort of development opportunities, you know, we think it's a very interesting time in the Irish market right now. you know, there is an opportunity for someone like Greencoat to leverage its access to route to market to see does that create chances for JVs and taking some exposure into more development stage assets as well. All of that, I think will come back in a more regular reporting cycle.
I think that's all the, all the questions we have for now. We will look forward to seeing some of you on the roadshow over the coming days.