Good morning. Mikkel and I are here to present to you the first quarter results for 2021, the headline, as we put it today, is strong growth and solid cash flow. We are enjoying the proceeds from SN Power for the first time after having completed the acquisition transaction in January this year. We have had a good quarter in hydro production, both in terms of hydrology and also revenue, particularly from the Philippines. The overall production came to 854. That's more than two times up since the first quarter last year. Correspondingly, the power production cash flow to equity reached NOK 681 million. As we have informed you previously, we have had financial closure in Pakistan, we have now also started the construction.
We enjoyed sharing with you all our ambitions toward 2025, and we will then aim for 15 GW to be installed, resulting in a CapEx of NOK 100 billion. If you look at our portfolio that is under construction or in operation, we are at more than 3,500 MW at the moment. We continue to treasure our business model where we develop, we build, own, and operate renewable energy. As you can see to the right here, we have almost 400 MW in Latin America, 500 MW in Europe and Central Asia, 1,175 MW in Africa and the Middle East, and 1,450 MW amounting to 3,500 MW. The spread you see in the right-hand corner, more than 2,000 MW of solar plants, hydropower 1,400 MW, and in the beginning of a pretty strong growth for wind, we are operating at 39 MW in Vietnam.
We are now towards the end of April. We have nine or 10 months to go towards the end of the year, and we aim to have 4.5 GW in construction or in operation by end of the year. Here you see the bridge. Pakistan has now moved into construction. Tunisia, we're working on there, negotiating the final documents with the Tunisian authorities. Of course, the tariff is already secured, as we have informed you about previously. Brazil, two projects, 101 MW and 530 MW, the largest one in close cooperation with Equinor and Hydro. The largest project there is 900 MW in India. Of course, there are other projects as well that we're not showing here that is a part of the portfolio that we're working on. Of course, the pipeline is much, much bigger.
For us, environmental and social governance is continued to be extremely important. We will remain reporting to you about this over the next quarters as well. Right now, we have about 70 projects that we're operating on across the world. They are focusing mostly on education, infrastructure, energy, and health. To give you some examples here, we have conducted vocational education courses for about 200 teenagers in Ukraine. Argentina, creating small businesses across the region. You need a hydro or a water tank at high level. This we have done in Honduras. Of course, school heating project in Jordan, providing electricity and heating to nine schools. If you look at the bigger picture, we of course have just, and you can find it on the internet, on our webpage. We have just released our sustainability report. For 2021, we had 33 targets.
Just to mention a couple, we have life cycle management, climate target, responsible supply chain, and human rights. Below this, we have programs that are focusing on important elements. For example, on the responsible supply chain. We follow the product from when we receive them all the way back to where they are incepted or where they started manufacturing to make sure that there is high quality at all levels of the supply chain. This is not easy, so of course, we're using a lot of resources, experts to assist us also with inspections to these suppliers so that we see that they're meeting our targets.
We will also focus on the life cycle of our products, making sure that once they're installed, I mean, from the beginning, manufactured, installation, operation, and once they are finished with their useful life, where do we get rid of them or how do we recycle them? This is also something that we are working extremely hard on. We will now move over into the numbers, and I'm happy to introduce Mikkel Tørud, who will share those numbers with us. Thank you.
Thank you, Raymond. Let me start by going through the proportionate financials just briefly. We report about NOK 1 billion of revenues in Q1 and an EBITDA of NOK 636 million and cash flow to equity of NOK 571 million. If you look back at the last 12 months, we report revenues of close to NOK 3 billion and EBITDA of NOK 1.6 billion. If we go a bit further into this and look at the different segments, you can see that, as expected, power production is the main and largest contributor to the revenues and EBITDA in the quarter and also over the last few quarters now also as SN Power has come into our portfolio. We've seen strong growth also despite currency headwinds that NOK have strengthened against most currencies.
On the services side, we've seen stable performance, while D&C revenues continue to be fairly moderate with limited also gross margins. The OpEx of this segment was about NOK 60 million in the quarter. About 1/3 of this relates to the hydropower and hybrid solutions and the development of that. That's the increase from last year in the development and construction segments. On the corporate side, we report a negative EBITDA of NOK 25 million. That's a moderate increase also from last year. Also worth mentioning that in 2020, we had about NOK 100 million of non-recurring SN Power transaction cost in the corporate segment. Moving into the power production segment, we report NOK 924 million of revenues and NOK 704 million of EBITDA. The hydro assets added NOK 367 million of revenues, or sorry, of EBITDA, and that's, of course, representing most of the growth, compared to last year.
Raymond also mentioned a strong performance on the Philippines, EBITDA here of NOK 243 million, up more than NOK 100 million from last year in the first quarter. That's a significant growth and an important part of our portfolio. The solar assets delivered stable, compared to year-over-year on the EBITDA side. We had a debt refinancing on the Philippines and released close to NOK 400 million of cash. This is part of a long-term strategy of basically releveraging the assets there, and we expect to do so every five to 10 years, based on the fact that we have long-term assets with very long lifetimes. This is a slide I also presented on the Capital Markets Day, giving a bit more insight into the power production segments. On a pro forma basis, we reported EBITDA of NOK 2.7 billion from the power production portfolio last year.
You can see we generated revenues from 13 countries. After debt service, we generated NOK 1.1 billion of cash. Average contract duration, more than 18 years on this portfolio. Services, fairly stable business for us. Report revenues of NOK 56 million, EBITDA of NOK 17 million, last 12 months, NOK 235 million with an EBITDA of NOK 83 million. On the development construction side, limited revenues and gross margins as I mentioned. Also as explained on the Capital Markets Day, there is significant activity ongoing with the focusing on the project development across all our regions and all technologies. We are spending more now than before on this, obviously to address a very attractive market, a very strong market as we see these days.
Now, I've gone briefly through the proportionate financials, and we report this way because we believe it's a good representation of the value creation across our business. At the same time, we of course also report under IFRS the consolidated financials. We see that to bridge the two angles is sometimes complicated, so I thought I could use the opportunity now to explain a bit how we bridge the movement from proportionate financials to consolidated P&L. Again, the proportionate financials is our report of revenues and EBITDA across the operating segments and is also where we adjust for Scatec's ownership of the various power plants. Now, under IFRS, there is really not possible to consolidate in that way, so you have two options.
You either fully consolidate the plants you control, or you equity consolidate the plants that you do not control or the subsidiaries that you do not control. In our context, we fully consolidate most of our solar and wind assets, and we equity consolidate the hydropower assets and a couple of solar assets on one single line on the net income line in our P&L. We also specify for each asset in our report which method we are using for each of the assets. To move from proportionate to consolidated, we have to do some adjustments, and I will explain these now. The first adjustments that we do is to add back the revenues for the other owners of our assets for the fully consolidated power plants. Here, revenues of NOK 279 million. That is the revenues that is belonging to our co-investors on those assets that are fully consolidated.
The next step, the next adjustment, is really to then deduct the revenues for those power plants that are equity consolidated. Here it's the revenues of NOK 511 million. We then add back the net income from these same plants, NOK 138 million in this quarter, on the third line in the P&L here. Under IFRS, we consolidate SN Power assets from the end of January, when the control was transferred. We actually took on the economic risk of the plants from the beginning of January. That's why the proportionate financials also include revenues for the full quarter, while the net income, the NOK 138 million here, is for the last two months of the quarter. If we include the January net income, that was about NOK 57 million, to get you to the full quarter results pro forma basis.
The last adjustments is the eliminations that you may be familiar with, where we eliminate the internal gross profit in the D&C segments and the internal revenues and OpEx for the services and corporate segments. Lastly, we add back our adjusted depreciation charge for historic internal gains that are mostly related to the D&C segments. This table we provide in each of our quarterly reports. We've done so for some time. Becomes slightly more complicated now with more equity consolidated assets into our portfolio. I think it's worthwhile to have a look at this. Of course, we're happy to also spend time with whoever are interested to go deeper into this. Let me continue with our financial position. We had total assets standing at NOK 33.6 billion at the end of Q1, up from NOK 26.7 billion at the end of last year.
We have now close to NOK 10 billion of investments in JVs and associates. Here again reflecting the hydropower plants that I just explained. The consolidated cash in the group stood at NOK 4.8 billion, proportionate cash at NOK 4.6 billion, and the proportionate net debt now at NOK 13.8 billion, as we have more debt at the group level, also part of the funding of the acquisition of SN Power. When it comes to the movement of the group's free cash in the quarter, we received NOK 723 million of dividends and distributions from the operating power plants. We invested NOK 359 million of equity, mostly through the acquisition of the Dam Nai wind farm in the Philippines. We spent NOK 3.6 billion of cash to settle the acquisition of SN Power. We also acquired NOK 490 million of cash from those entities.
NOK 2.9 billion of cash at the group level at the end of the quarter. I also thought we should reiterate our guidance on returns and margins from the Capital Markets Day. We are expecting an average equity IRR on our investments of 12%-16% on the power production side, and we expect a 10%-12% gross margin on the development and construction side of our business. Important to reiterate. On the funding of the 15 GW business plan, the NOK 100 billion of CapEx, we expect 60%-70% leverage on the NOK 100 billion CapEx based on long-term contracts, project finance. NOK 15 billion-NOK 20 billion of this will be Scatec's equity investments based on an ownership share of 50%-60%.
The funding of this equity is mostly coming through the cash flow that we generate from the operating assets, but also from the development and construction of the same new plants, as we have done also historically. We have NOK 4.5 billion of cash and credit lines available. There's a limited number, NOK 1 billion-NOK 4 billion we estimate, of other funding that needs to come in place, and we have several sources to fund that, either through more debt at the corporate level, tweaking the business model or the model in terms of ownership stakes, asset sale and so on. That's not a big concern as we see it. On the 2021 guidance, power production here, second quarter, 815-865 GWh.
For the full- year, 3,500-3,700 GWh . Also just to highlight on the development construction side now, with the new construction contracts we have related to Pakistan, we have an unbooked contract value of close to NOK 500 million. Of course, this will grow as we move more projects into construction. Services and corporate guidance here is in line with what we have already shared with you on the Capital Markets Day. Raymond, back to you.
Thank you, Mikkel. We have been extremely busy, and as Mikkel said, we are extremely busy now also developing projects in addition to operating them. You can see here the bridge from where we are today towards where we're going to be in 2025. Right now, we have under construction and in operation 2.1 GW from the old Scatec side, plus the new hydropower business in operation 1.4 GW, so it's 3.5 GW. Now, we have said that we're going to add to the 2.1 GW another 2.4 GW towards the end of the year, bringing it up to 4.5 GW plus the 1.4 GW. By the end of the year, the plan is to have 5.9 GW in operation under construction. Then we will add another 9.1 GW to bring us to 15 GW.
This is going to be very interesting for us because we will then, of course, use the market knowledge, the pipeline that we have, the partners that we base our expansion on. If you take a look at the next slide, you will then see our renewable universe. Where are all these opportunities going to come from? You know that we're working on some floating solar projects up there on the reservoir by the way. Offshore wind, onshore wind, batteries, and they will, as you may see it, sometimes come together in hybrid systems. As you can see, we will be thinking, of course, about the technologies, but also about providing the customer a system with different technologies, providing stable energy, stable electricity. The 12-GW pipeline that we have at the moment is, of course, a snapshot of our pipeline at the moment.
As we move in to the rest of the year, to 2022, 2023, and 2024, this pipeline will continue to evolve. If you just look at the snapshot, this pipeline as it stands today, you will see on the left-hand side that it will contain all the different technologies that we represent at the moment. Solar will, at the moment, be the most dominant one with 42%. We have some very interesting wind opportunities, both onshore and offshore, that we're working on. Hydro, lot of interesting opportunities there, too. I'll revert a bit to one opportunity that is very interesting on a later slide. The Release concept, although the percentage is small, it will have a big impact. This concept will have shorter contract terms or contract periods. All in all, we are actively pursuing opportunities in all these segments that we have been sharing with you.
We are extremely optimistic about the future. You can see the opportunities or the pipeline spread out on the map here, the largest being Africa. By the way, we are the largest operator of solar plants in Africa with more than 1,000 MW in operation. Of course, Asia, Southeast Asia, Europe, and Central-South Asia is going to continue to offer us a lot of opportunities going forward. Brazil, also a very interesting market for us. Just take a look at this Release concept. The Release concept was developed to entertain market opportunities where the customers couldn't enter into long-term contracts, meaning 15, 20, 25 years. This is a lease concept where we take the opportunity to present to the customers a contractual structure that allows them to extend the contracts beyond five years, 10 years, making it flexible.
We entered into a first substantial contract a bit earlier in the year, 8.5 MW. The customer is Torex Gold. Here, the initial contract is 10 years, which is pretty good. It doesn't have to be 10 years. It could be five, three, or whatever. We have about 300 MW in the Release pipeline that we're working on. Very hopeful that this will be an important part of our business going forward. Dwelling a bit on the hydropower. This is the first time or first quarter that we're actually reporting on the hydropower performance. You've seen that we have enjoyed very high production from part of our business, particularly in the Philippines. If you dive a bit deeper into hydropower, you will see that there are some projects that are in operation that have the opportunity to be upgraded to perform better.
You can increase the performance by 10%, 15%, 20%, 30% sometimes. You can combine that maybe somewhere with greenfield opportunities, greenfield meaning that there are plants that are new from the beginning. You start with a loan, and then you build a power plant. That's why it's greenfield. You have a combination of several technologies. Moving over to the right on this slide, we are working on one particular opportunity in Africa, extremely interesting. It's a plant operating with 260 MW. That's the existing, that's the brownfield part of it. You can add another 220 MW to it as a greenfield. Guess what? These projects lend themselves to floating solar as well. If you combine all of these, you have a hybrid plant with old, new hydropower, and new solar power. It's extremely interesting.
If you look at the effects on the power price, we will be able to actually reduce the overall footprint of these plants and also provide a lower cost to the customer. Very interesting. Of course, to do that, you need hydropower competence that we have with our new colleagues from SN Power, really understanding how to design a hydropower plant. That is not straightforward. Of course, it's a lot of civil engineering. You have to know what you're doing, but of course, that experience we have now with SN Power. This is my final slide. We are very optimistic about the future, like everybody else. We think that the future is going to come quicker towards us in terms of capacities than what we see here. Also if you look at the market projections presented by Bloomberg and others, the volumes are huge.
Of course, the business propositions are going to change. You will have more combination of technologies. That's why we moved into hydropower, wind, batteries. We're pursuing big projects as we speak. Our goals for the next four to five years is to invest NOK 100 billion, resulting in 15,000 MW under construction operation in four years' time. We have a growing team. We have a very good team with a track record. We have a lot of people really wanting to join us, not only in Norway, but around the world. As Mikkel has shared with you, the cash flow that the company is generating at the moment actually almost closes the gap on what we need to actually come up with in terms of equity to deliver on the 15 GW.
As always, environmental and social governance will be at the center of everything we do. If you look at the people that work with us, almost 10% of our people are engaged at all levels within the ESG. We're now ready for questions, and thank you for listening in.
Okay, we can start with Eivind Garvik from Carnegie. What is the main reason to the EBITDA beat from power production?
I can answer that. The main reason is the performance on the Philippines. That is the asset where we have power sold into the wholesale market and the ancillary service market, and where both hydrology and power prices is impacting performance. Hydrology has been very favorable in the quarter, and also power prices have been better than before, and especially compared to last year. That is the main reason for that beat.
Andreas Bertheussen from Kepler Cheuvreux, he has a question related to this. If you can comment on the assets in Philippines, Uganda, and Laos, how they have performed in the quarter compared with normal or expected run rates?
Yeah. In Uganda, there is basically capacity payments, meaning that we get paid for having the plant available for the offtaker. That's a fixed payment every month, every quarter. That's not really impacted by volatility, if you like. In Laos, there is a certain flexibility on the offtaker on when to take volumes during a year. That's been somewhat weaker in the first quarter than we would normally expect. On the Philippines, I think we've seen, at least from a production and hydraulic perspective, a very good quarter. Obviously, I think we can also see power prices historically being even higher than what we see now. That's, of course, a bit of uncertainty also there.
Jonas Larsen from ABG. Would it be possible to elaborate a little bit on the possible timing of contract awards for the projects that you mentioned on slide six, the six projects slide?
It's only nine plus months left of the year, it sort of gives itself. For South Africa, we have provided the authorities with all the answers that they have requested. We're done with our job. It's a processing time there. How long the authorities will take to review and come back with their decision, we don't really know, but we're hopeful it's going to happen soon. In India, we have been negotiating the contract now, or contracts, because it's a fairly complicated project with EPC contracts, with shareholder agreements, with land agreements, with a lot of things. Just to let you know, the chief negotiator on the other side of the table that we negotiated with actually had Corona. So he was out for two to three weeks. We've had a slight delay there, but we're slowly closing in on the date of signing, we hope.
I don't really want to give a specific date for that. We're working hard on it. In Tunisia, we have signed, we have negotiated and signed the final documents. Of course, we awarded the project a year and a half ago or something like that. There we have also signed the documents, so that's progressing. Also on the big project with Hydro and Equinor, those documents are also being negotiated among the parties and progressing, but I don't really want to give any timing. They are on the completion list, the list of projects to be completed and move into construction by end of the year. I also like to say and repeat what I said previously, there are other projects as well that are not on this slide with six projects that could be candidates, but let us concentrate on those six projects first.
Question from Jørgen Bruaset in Nordea. Can you elaborate on the situation in Ukraine regarding the covenant breach?
Yeah. We have reported today of a covenant breach at the end of the quarter, and that is related to the situation we've seen for some time, unfortunately, in Ukraine, where basically the utility have been behind on payments. It has improved over the last six months, but there's also a discussion on the long-term financing for the Ukraine portfolio, given the situation. Basically, we are in a very good dialogue with the banks on this. We are expecting to find good long-term solutions with our financing partners. At the end of the quarter, we were basically breaching a couple of covenants, and then we are basically discussing a long-term viable debt level for these projects.
Another one from Jørgen in Nordea. Can we expect to see further refinancing gains like in the Philippines going forward? Is there any color you can put on refinancing potential in the portfolio?
It's something we have touched upon historically as well over the last few years. We've been a bit reluctant to share updates on that process with you because we want to make sure it's happening. We are in dialogue on at least in one market on this. The structure is slightly different where you sell power in a power market, and you have a perpetual license like you have in the Philippines, compared to a situation where you have a 20-year PPA. The potential is not the same, I would say, on a per megawatt basis for those PPA refinancing opportunities compared to what we saw on Hydro, just to be clear on that.
There's a follow-up from ABG on Tunisia, why this project is dragging out in time.
They changed government. It's very simple. You have the new civil servants that we've been negotiating with. As I said, that belongs to the past. That was last year. We are now efficiently moving ahead in Tunisia, so there's nothing holding us back right now. It's more like optimizing the project execution schedule. We have a very active team on the ground in Tunisia, very good people, and moving well ahead on the project.
Another from ABG. Were there any one-off items in the quarter that we should be aware of?
No. I would, of course, just reiterate this refinancing proceeds on the cash side, which affected the cash flow to equity that we reported, and I think that's well explained in the report. When it comes to the P&L as such, there's no one-offs.
There's a question on Release. How much do you expect Release will contribute with in the coming years?
Well, we're not really giving out the numbers, but this was 8.5 MW . We have a project list with project names, customers of 300 MW. We believe it's going to be substantial. We are extremely optimistic about this. The mining industry is now back on, powered by battery needs, precious metals, different type of ingredients that you have to put into the batteries, and it's moving up very quickly, and prices are also helping this. We see now after the corona has sort of leveled off and on its way down, that some of these mining companies are really interested. What's interesting is that it's not like only saving the environment. That is good, they're also saving a lot of money. In the Release concept, it's a flexible contract structure that they like. We are very optimistic about the future.
I don't know if you want to add anything, Mikkel.
Yeah, maybe just saying that we see that the prices we can achieve on some of these concepts are obviously higher than what we see on 20, 25-year contracts. That's just important to keep in mind. On the financing of it, at least the first projects will be equity financed. The capital deployed on these projects will be much higher per megawatt than what traditional power plants, utility scale plants will be. The cash flow generated per megawatt will, of course, also be much higher. From that perspective, you cannot compare Release megawatts with utility scale megawatts in our portfolio. That's just good to keep in mind.
Very important point.
A question from Anders Rosenlund in SEB. Congratulations on the great report. Could you repeat your comments on the NOK 1 billion to NOK 4 billion equity gap towards 2025, and should we expect the gap to be even higher for periods of time affected by construction or phacing et cetera?
Well, I think the main message is that we are in a really good position when it comes to funding this business plan, and we have a lot of flexibility in how we structure ourselves. I would say that the numbers we presented in terms of both capital structure and funding is relatively conservative here. Obviously, if we invest and have a lot of volume happening at the same time or investments happening at the same time, that may have a constraint on the funding side, but there's also solutions available for that. I think we also see at the group level, a strong support from our banks, also in the bond market that we were active in now in the first quarter. We saw a very good response. It's a number of instruments available to us to handle that.
We are not very concerned with that funding.
From ABG, I noticed you changed the power production profitability target from 12%-16% return equity to 12%-16% equity IRR. Could you please comment on that?
Yeah. We had some feedback on this after the Capital Markets update. We have had no intention of changing the definition of our return guidance on projects. We wanted to clarify that we continue to guide on average equity return on the projects as we have done in the past. Just to clarify that, there's no change to our guidance or definition of guidance when it comes to investments and returns.
A follow-up on the Brazil contracts. Is price an important subject in these negotiations, and do you expect to be able to generate 12%-16% IRR on projects in Brazil?
Price is always important for everybody. Of course, Hydro is both a buyer and a provider along with Equinor and us. I don't really want to go into detail about profitability. That wouldn't be appropriate, I think. It follows our policies. I'll rather return to that later. I don't know if you want to add anything, Mikkel.
I think it's again within our guidance. That being said, the 12%-16% guiding is of course across the portfolio, across different currencies and technologies. There will be, depending on the currency, location, technology, different levels of returns. Of course, I'm not commenting specific on this opportunity.
Okay. Ingrid is telling us that that was the last question. More question this time. I'm happy about that. Hopefully, we will beat the record of number of questions when we see each other in July. On behalf of Mikkel and myself, thank you very much. See you next time.
Thank you.