Welcome to Magnora's quarterly update for Q3 2026. Good morning to everyone. Some highlights from the quarter. We have a strong financial position in the group, NOK 742 million in cash, NOK + 150 million credit line. The group OpEx was just around NOK 11 million , according to the guidance provided in the Q2 report. The good news from the quarter is that one of our clients in a previously sold project in South Africa reached a key milestone with an attractive grid offer for the project we sold them. It is a 100 MW solar PV project. There is a minor permit needed in Q4, and with that, we will be subject to milestone payments going forward. Also, for several battery storage projects sold in 2024, we may have large earnout payments.
On October 7th, the South African Ministry of Electricity and Energy announced a new unexpected 4,600 MW BESS procurement process. As many of you know, we have many sites in South Africa, and we actually have over 20 different sites. We believe that this will be a favorable position for us going forward in 2027, and something new to our investors. Additionally, we have ongoing sales processes in South Africa and the U.K. In South Africa for the cluster sales, and in the U.K., we were provided a new update from the grid authorities regarding our Gate 2 projects. Two solar PV BESS projects in U.K., 156 MW, with expected grid connection date in 2028.
The grid authorities have finally come up with a new timeline, which confirms the timeline earlier this year, that between today and end of March 2027, we will get the final grid offer. That will make them sellable at much better prices than we could have received in 2026 without that firm grid connection date. In addition, we have grown the data center portfolio quite substantially, up to 910 MW gross, up from 650 MW in Q2. We have ongoing sales dialogues with multiple projects, and we have added the Risti project, 180 MW, expandable to 400 MW. Subsequent event. We have been very fortunate that Lars Schedin will step in as the Senior Advisor, Industrial Advisor for our data center offerings, both in Magnora Data Center, but also for our AGV business in South Africa.
He brings decades of commercial experience, but not least, long experience discussing and negotiating with hyperscalers.
Since 2018, we have returned over NOK 1 billion , and we have done that because we sell at the right moment in time, when all the permits and all the details are in place. If you sell too early, you will get less upfront, and the customer could warehouse the project for a long time, and it could maybe have had a better home some other place. Still, with this process, we have had this return over these last years. Looking at the Magnora company now, we have diversified the business quite significantly in 2026, and now data center is part of the group and also part of the earnings going forward, even though we did the IPO. We have a 52% share in the data center business, and data center margins are significantly higher than renewable projects. In some instances, 10- 20 times higher.
This will have a meaningful and big impact for the Magnora shareholders with our development model going forward. The value creation model, we sell before ready to build, but the most important part is that we align buyers who compete for the same project at the same moment in time. Earlier sales give lower prices, and later sale give higher prices, but it also impacts the remaining value of the portfolio. If we sell too early and someone is interested buying the platform at the later stage, it is silly to sell at a lower price early just to sell. That is why we keep a large balance sheet and have no debt. The group do this in a very efficient way since we do greenfield. We develop stuff from scratch most of the time, and sometimes through partnerships. We very rarely do M&A.
This gives us good return, good control over cash, and what you have seen today is that we have earnouts from Evolar and Helios perhaps coming up, and we also have the earnouts from the South African business from sales we did in 2023 and 2024 because of small technical issues that have sorted out, and also new market conditions where Eskom comes up with a new BESS round, for instance. Regarding the portfolio, it stands now at a little above 10,200 MW, and we have several new projects coming in over the next few months, and we have a high focus on data center assets for the group's growth. I will get back to that later. If we look at South Africa in particular, we have a focus on selling one cluster per year of wind, solar, and BESS.
For a few of these projects, we see that there is an extension possibility to do data center projects. Our team has worked the last nine months to identify these opportunities, and we have pinpointed two projects which we think can become 300 MW each in the existing clusters we are already developing. Lars Schedin will assist the team maturing this project and discussing with potential hyperscalers and tenants to see their interest regarding these projects. Give you some heads-up on South Africa. It is much more mature than many people assume and would know. Microsoft and Amazon are big players in that local market already. It has very advanced infrastructure, both on fiber and power, and affordable power due to all the solar hours and wind conditions and the power you get from the grid. The market is expected to triple by 2031.
It is emerging as a data center hub for Sub-Sahara. I spent quite some time over the last month meeting with local investors and banks to discuss these matters. A little bit more about Lars Schedin. He sits on the boards in Magnora today, will step down, become an observer in the board, and act as a consultant going forward for Magnora, but still sit on the board in Magnora Data Center. Lars brings in decades of experience from commercial activities for Electrolux, H.I.G. Capital , 3i, and not least, he started a data center business in 2016 with some colleagues and friends, and that business was sold in 2023, but he was the co-founder and CEO during his tenure in the business.
He is one of few people in the Nordics who have invested his own money in a data center business, acquired hyperscalers as customers, and sold at a big profit for himself and for his shareholders. We are extremely pleased to have him on board as a consultant and more active in Magnora Data Center going forward, as interest for our project has increased significantly after we got the grid connection in Finland in August. South Africa, one of the largest renewable build-outs of any growth market outside China and the U.S. Local market players expect 100,000 MW- 150,000 MW of new renewable towards 2040. Very good wind conditions, very good solar conditions. It has batteries. Eskom were one of the first to introduce that in a market globally, and they have rooftop solar. The battery tender coming up.
It is a 4.6 GW battery, triple the size of the previous battery round, where we were awarded the Red Sands project with Globeleq in 2023. With 20 projects, we should be covered to have some exposure towards this announcement, and we are very excited about this opportunity and also our project portfolio that may fit some of these procurement requirements going forward. In addition, we have five clusters, and we think we can sell one cluster year-over-year by 2030, 2031. Here you see the size of the different projects, technologies, and what we can do going forward. These are projects we have spent quite some time to develop from 2021, 2022, 2023, and we need to sell them at a good price, and we sell them at a good price when all technical clarifications are sorted out.
This is very important for our business model, as I mentioned in the previous slides, and it has a big impact also on the remaining value of the portfolio. Both U.K. projects, finally, they have been fully developed and permitted for quite some time, but due to the long grid queues in the U.K., they changed the rules, first come, first served, to first ready and needed and first connected. The grid company in Northern England has given us a date previously of grid connection to be expected in 2028. The grid authorities confirmed the timeline earlier this year that the projects in Gate 2, like ours, we get the firm grid connection date by October this year until March next year. This will be very exciting, 156 MW. Solar and BESS projects are quite needed in the U.K., and we have very good dialogues on these projects with clients.
Hämeenlinna, a key project for us and the first large data center project, which we invested in in January of this year. In less than eight months, we have used our powered land business model and secured a grid connection with the DSO, building permit, commenced the environmental work for a larger site. We have secured LOI with a local utility for heat reuse, and we work really well with the municipality on how our project could contribute to the local community. Very important project for us. It sits very close to Helsinki in the area with 4.2 million people, and unemployment in the area is around 11%. The site is already zoned by the municipality. Trees were cut long time before we made the agreement with the municipality, so it is ideal for an industrial development together with the local community.
We're very pleased to work with the mayor's office in Hämeenlinna and have been really well received by the value chain and ecosystem in Hämeenlinna and Finland. We have very strong interest for this project, and sales dialogues have started. Secondly, we acquired a Risti project just five milliseconds from Helsinki in Risti, in close outside Tallinn in Estonia. It's a large solar BESS and wind project adjacent to the data center project. Sunly is a company we know well from our industrial advisor who helped finance their previous business back in the early 2000s. They've been very successful. They have 1,000 MW of powered land, wind, solar under development, in operations, or under construction.
They have large international investors, also Norwegian investors in Sunly, and we were fortunate that they invited us to do a partnership with them to develop this as a sort of behind-the-meter data center project that could become up to 400 MW. It sits in the middle of 110 kV, 330 kV intersection. So it's an energy park, a large data center project. We're very pleased to work with the people in Sunly, the local community, and a very tech-savvy sector in the country. Group cash of NOK 742 million and OpEx in line with previous guiding in Q2 for the group, so around NOK 11 million on group OpEx. Very good and solid funding.
Activities in Europe on renewable have been streamlined, and we await technical clarifications on a few of the projects there before we sell, such as in Italy, Scotland, Germany, and in Norway, we're in dialogue with a few potential customers. In the South Africa, we have the new earnouts, which could exceed over NOK 100 million on previously sold projects, and that excludes Helios and Evolar. A repeat from previous listeners is Magnora in the value chain. We typically exit, or always exit before ready to build, and the most important things to do are to find a good project with good unit economics and very few technical problems. Some of these problems are not discovered before later in the development process, and maybe sometimes after we've sold the project, so we help the client bring all the technical issues across the finishing line so they can build.
Our model is capital-light and has high risk. For our clients, it's capital-intensive, and they allocate a lot of capital, and they need to know that the project can be realized within the timeframe because they have their board and investment committees. So what we do in advance is serious business. It takes a long time, and it's a lot of technical issues that needs to be sorted out. So less technical issues, better upfront price, and better total price. This also impacts the value of the remaining portfolio if we were supposed to sell the whole platform.
We have an active project portfolio, and we have value chain flexibility, and in particular in the data center business, where we have funding also to own and operate the smaller sites that give us credibility, access to the value chain, and where we can grow assets in a little different way than in a typical renewable business. But for us in the data center space, it is quite important that we have cash and that we are a DC operator. The grid companies appreciate that, and also the municipalities and landowners. They see that we are a serious player, and during the fall, we have seen that some projects sold to startups come back in the market, and the landowners ask us if we can take a look at the project and help them with our operating model.
I think we have a strong, incredible value proposition that is well appreciated by the clients and the market. What we do is shorten the timeline. We do stuff that many do not take seriously, or they think it is easy to do it, but it is very important that noise, footprint, height restrictions, water usage, and all of that stuff is handled in the best possible way. You do this by having an ecosystem of consultants, local engineers, local permitting specialists, environmental specialists, work closely with the EPC providers, with their designs, and sort of have a total package for a DC operator, that this is the place you can build safely, where the local community embrace your offering, and it provides benefit for the local community. The more of these issues we sort out, the faster the project could move.
Like in Finland, we try to move the project forward through this work. We have a grid connection date, and we are working to shorten that through this type of work. It is very tedious. You need professional people with spirit, and who could work well with people externally. Strategy of simple rules. I have gone through this many times before, but we need good local managers and highly spirited teams with high integrity. Sometimes we try to sell things early to learn, but also to show that our business model works. I think in the data center space, we may be able to sell before we anticipated, at least in the early start of this year. Things go ahead very, very quickly, and we see that there is a lack of good projects in Europe on an industrial scale.
We see that many projects have been moved back or have had environmental issues, and it sort of benefits our model from the renewable space, where environmental issues are an integral part of what we do. In the board, we have proposed a new board member from our nomination committee, as Lars Schedin steps in as a consultant, and that is Steve Harris, a very experienced and successful capital manager with a base in California. He knows the U.S. market really well and can help us on business planning and strategy, and also investor relations toward international energy tech investors. We are very pleased that the nomination committee were able to agree with him. The remaining people you know from previous quarters. Jean-François Berche, in particular, was employee number three in Amazon Web Services, CTO in GreenScale.
Really good person to have in your board, attract interesting opportunities in the market. We discuss with Lars Schedin and Jean-François Berche on a daily basis, and very pleased that Lars will step in and add value to the rest of the team, as sales interests have increased quite considerably over the last three months. Regarding financials for the group, net loss of NOK 28.4, so an improvement from Q2. The data center platform, NOK -23.4. Some of this was employee share incentive costs, so those are non-cash. We have a trading capital of NOK 6.9 billion. From the business historically, we have some deferred tax assets that should have good value for some of our clients, perhaps, going forward. The cash flow, net operating activities, NOK -25.8. Improvement from NOK -36.5 in Q2.
Net investment activities, NOK -36.6 due to some M&A and the acquisition of a site in Oslo for the AI/EDGE data center. Some remaining IPO costs on the financing activities, and share buybacks, not least. The cash usage is in line with our IPO presentation and what we've communicated previously, so we exit the quarter very strongly and with very promising outlook compared to the start of the year. Portfolio grows quite significantly on the data center side. Also in South Africa, strong inherent growth. In Europe, we're carefully growing the renewable business. As I mentioned before, margins are much, much better for us with our business model in the data center space, so that's where we'll focus. Magnora shareholders will benefit from both areas. So, focus ahead. The portfolio, we expect it to grow during November and December.
We're just one month into the quarter and have a still target of 12 gigawatt. We will grow the company in value and sales going forward, also collecting more earnouts, it seems. We're monetizing the projects in the U.K. and South Africa, and the South African earnouts. We have quite good interest for our platforms, actually several platforms, and we're in discussions now with various investors. We're going to develop and sell hybrid renewable projects, and also including data center projects in South Africa going forward. We work very diligently on that portfolio with a local team. We've been there several times. Lars Schedin will form part of a team lead on the DC part of that. Group costs remain the same.
Price of energy projects, renewable remain basically the same in 2026 compared with previous years. I think we're going to see a pickup now as powered land gets more challenging. In Finland, we saw the PPA Google entered with Fortum, where some analysts estimates it was around EUR 85 per megawatt hour. I think it's the highest PPA I've ever seen in the Nordics, and it's a 20-plus year PPA. So, renewable projects should get a new spring moving forward, and this can also bring more energy and life into the earnout in, for example, Helios, since we've seen very few solar PV wind projects being sanctioned the last two years. So, the outlook entering 2027 is much more promising compared to the start of 2026.
We have a lot of sales processes going on, and we will always sell when we get the right price for our projects. With our lean cost model, we can afford to do that. Sometimes it is technical clarifications needed outside our control. We work closely with local consultants, grid specialists to sort that out, and also with environmental specialists to sort those out. With that, I would like to thank you for your attention. It has been an extremely exciting year, and we have not had better outlook for our products and sales than before in the heydays of Helios a few years back. We are very excited about the end of the year and 2027. I wish you all an amazing day.