Good day, thank you for standing by. Welcome to the Enlight Q4 2022 Earnings Call and Webcast. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one and one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one and one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Yosef Lefkovitz, VP of Corporate Finance and M&A. Please go ahead.
Thank you, operator. Good morning, everyone, and thank you for joining our fourth quarter and full year 2022 earnings conference call for Enlight Renewable Energy. With me this morning are Gilad Yavetz, CEO and Co-founder of Enlight, Nir Yehuda, CFO of Enlight, and Jason Ellsworth, CEO and Co-founder of Clēnera. Gilad will provide some opening remarks and will then turn over the call to Nir for a review of our fourth quarter and full year results, and then to Jason for a review of our U.S. activity. Our executive team will then be available to answer your questions.
Certain statements made on the call today, including but not limited to statements regarding business strategy and plans, our project portfolio, market opportunity and potential growth, completion of development and the company's future financial and operational results and guidance, including revenue and Adjusted EBITDA, may be forward-looking statements which reflect management's best judgment based on currently available information. These statements involve risks and uncertainties that may cause actual results to differ from our expectations. Please refer to our earnings release for more information on the specific factors that could cause actual results to materially differ from our forward-looking statements. Although we believe these expectations are reasonable, we undertake no obligation to revise any statements to reflect changes that occur after this call. Additionally, non-IFRS financial measures may be discussed on the call.
These non-IFRS measures should be considered in addition to and not as a substitute for or in an isolation from our results prepared in accordance with IFRS. Reconciliations to the most directly comparable IFRS financial measures are available in the earnings release and the earnings presentation for today's call, which are posted on our investor relations webpage. With that, I will turn the call over to Gilad.
Thank you, Yosef. Thanks all for joining us today. We are very excited to announce strong results in our first earnings conference call as a U.S. public company. We delivered both record annual and quarterly results, continuing to demonstrate our track record of converting projects from development to operation. In 2022, we succeeded in connecting 810 MW over the course of the year. These successful conversions and strong performance across our business drove record financial results in 2022, with revenue up 88% to $192 million and Adjusted EBITDA up 96% to $130 million. In addition, we sold $80 million of electricity, which was not recognized under IFRS as revenue or Adjusted EBITDA for our project, treated as financial assets.
As a result, the ITC arm of the business is already generating material cash flow. The company generated $90 million of cash flow from operation in 2022. Before we dive deeper into numbers, since this is our first earning call as a U.S. public company, I wanted to take a few minutes to talk about Enlight and what we believe makes us unique. First off, we are a true greenfield developer of utility-scale renewable energy projects. Our greenfield development expertise enables us to source projects from scratch organically and control the full project life cycle. We source land, find scarce interconnection, manage complex relationships with local communities, find offtake for power, and ultimately construct, own and operate our projects over the long run. This approach has helped us to achieve market-leading project returns, which we have demonstrated over the past decade, having successfully developed 4 GW of projects.
Second, we believe we are in the right market at the right time. Our unique footprint across the U.S., Europe and Israel provides exposure to some of the fastest-growing renewable markets in the world. We believe our U.S. portfolio, which is largely located in the western part of the country, is well-positioned to benefit from the game-changing Inflation Reduction Act. In addition, we believe our European portfolio, located across nine different countries, is positioned to benefit from the high power price environment and increasing urgency from the European Union to accelerate the energy transition. Thirdly, we have significant portfolio diversification, not just in geography, but in technology and revenue structure. We are not only in solar, but are experts in working in solar, storage and wind. We are not 100% contracted, but we are not overly exposed to merchants.
This provides us with clear visibility on our cash flow through long-term PPAs, together with upside potential through select merchant exposure in Europe. Finally, we believe we have a cost capital edge. Through the credibility we have built, having successfully developed 4 GW of projects, we've been able to cultivate the appetite of institutional partners on a global basis over the years.
This is giving us access to what we view as a competitive cost of capital, which has amplified our equity returns. As the first pure-play utility scale developer to be publicly traded on a national exchange in the U.S., we aim to deliver value for our shareholders by continuing to deliver on our twofold objective, executing on above-market project returns and above-market growth. As many of you know, we have been a public company in Israel for the past decade and have produced very strong results and shareholder returns.
We were very gratified by the response to our U.S. IPO. We intend to be very active on the investor relationship vector in the U.S. market and to deliver the same level of transparency and engagement that we are known for in Israel. Moving now to the fourth quarter of 2022 and full year end results. In short, Enlight had a terrific year and we believe the business has never been better positioned. The year was characterized by 2 main themes. 1, the successful conversion of the project portfolio, and 2, the optimization and de-risking of project returns.
Starting from conversion, in 2022, we succeeded in connecting 810 MW over the course of the year, including Gecama, the largest wind farm in Spain, Emek HaBacha, the largest operational wind farm in Israel, and gradually Björnberget, one of the largest wind farm across Europe, which we expect to reach full COD by the end of Q2 2023. Similarly, we continue not only convert projects to operations, but also progress projects to the start of construction. In 2022, we commenced construction on 630 MW of generation capacity and 1.7 GWh of storage. This included Atrisco Solar, our flagship solar and storage project in New Mexico.
We now have 1 GW of generation capacity and 1.7 GWh of storage capacity under construction, which provides clear visibility on our future performance through 2024 as projects come online. Finally, we expanded our mature project portfolio by nearly 0.9 GW of generation capacity over 20% this year through our successful development efforts in the U.S. and Spain. As a reminder, our mature portfolio includes operational projects under construction, projects in pre-construction, meaning those due to commence construction within a year of today's date, and projects with signed PPAs, which is our portfolio of projects that we consider largely and relatively de-risked.
With a total mature project portfolio of 4.5 GW generation and 2.7 GWh of storage, all of which is expected to be operational by the end of 2025, we see a clear path for the future of our business. Moving to the second theme. This year, we successfully managed to navigate a volatile macro environment, which included supply chain challenges and overall cost inflation. We secured increases in PPA prices of around 17%-25% for projects totaling around 1 gigawatt. These price increases enabled us to offset the return compression we had seen from increased CapEx and financing costs. We are currently in advanced negotiation with off-takers to increase the PPA price for an additional 900 MW of contracted projects. Our ability to secure these price increases is driven by the strategic interconnection position of our projects.
Off-takers lack energy and capacity as there are very few large-scale renewable energy projects that can meet their procurement needs, given jammed interconnection queues. Our projects, which are advanced from an interconnection perspective and of significant scale, offer utilities the solution they need. As of this release, we have nearly 8.5 GW past system impact study, which we believe is a unique position in the U.S. market. On supply chain, we believe we have been ahead of the curve, particularly in the U.S. Our first project, Apex Solar, was sourced with solar panels from Waaree, a tier-one Indian supplier, and we continue to receive deliveries to the project site. We have since expanded our relationship with Waaree and now have the ability to purchase up to 2 GW from Waaree for our U.S. portfolio through 2025.
Similarly, on battery, we have acquired utility scale battery solutions from a U.S.-based supplier. This will enable us to benefit from the domestic content adder on storage, a unique advantage in battery where there are very few U.S.-based suppliers. Looking to 2023 and beyond, we benefit from what we see as healthy adjusted PPA prices, de-risked supply chain, material re-regulatory benefits, and certainty post the IRA and REPowerEU, and a substantial pipeline of advanced development projects in addition to the mature portfolio, which totals 4.2 GW. We are also seeing significant demand for battery storage, especially from off-takers in Western U.S. Battery helps us accelerate our growth and increase project returns on the same development effort.
These are all tailwinds to our business. Based on the positive trends in the business and the factors I described, we are increasing our mid-range annual deployment guidance from 1-1.2 GW per year to 1.5 GW per year, starting from 2026 and beyond. Over time, we also expect that the U.S.-based project will represent at least 50% of our business. I'll now hand it over to Nir to discuss our results in 2023 outlook.
Thank you, Gilad. Before I provide an update on 2022 performance and 2023 guidance, I would like to discuss some of the recent volatility in the Israeli financial market over the past few weeks, which has been driven by political uncertainty around the proposed judicial reform. While Enlight is headquartered in Israel, ultimately, we are largely an international company. Pro forma for the IPO, 81% of the company's cash as of year-end was held in dollars or euros. In the fourth quarter of 2022, approximately 80% of our revenues were denominated in either euros or other European currencies. We have limited exposure to the Israeli shekel, which reflects the growing part of our business in Europe and the U.S.
It's important to note that we have not made any deposits or other investments with Silicon Valley Bank, and to the best of our knowledge, have no exposure to it. In the fourth quarter of 2022, the company's revenue increased to $61 million, up from $35 million in the same period in 2021. The growth was mainly driven by the addition of new projects, including Harkama, Emek HaBacha, and Sela, which contributed an additional $32 million in the fourth quarter and the recognition of all profits from the sale of electricity by the Halutziot project from the second quarter of 2022 as revenue following its reclassification, which contributed an additional $2 million to revenue in the fourth quarter.
This positive impact was partially offset by lower production and one-time event which reduced availability that had a $6 million impact and weaker efforts which had a $3 million impact. In addition, we sold $2 million of electricity in projects treated as financial assets in the quarter, which under IFRS we are required to account for as a financing income or other non-P&L metrics. In the full year 2022, the company's revenues were $192 million versus $102 million in the full year 2021. The increase in revenues was mainly driven by the addition of new projects which contributed an additional $86 million. The reclassification of Halutziot which contributed an additional $12 million and $2 million from PPA inflation indexation.
This positive impact was partially offset by lower production and one-time events which reduced availability that had an $8 million impact and weaker effects which had a $6 million impact. In addition, we sold $80 million of electricity from projects treated as financial assets in 2022, which under IFRS we are required to account for as financing income or other non-P&L metrics. In the fourth quarter of 2022, the company's Adjusted EBITDA almost doubled to $43 million compared to $22 million for the same period in 2021. The increase was driven by the same factors which affected our revenues increase in the same period. For the full year 2022, the company adjusted EBITDA also nearly doubled to $130 million compared to $66 million in 2021.
The increase was driven by the same factor which affected our revenue increase in the same period that was offset by an additional $8 million from corporate overhead expenses. I would like also to reiterate Gilad's comment on the company's growing cash flow. For the full year 2022, the company reported $90 million of net cash from operating activity versus $52 million for the same period in 2021, an increase of 73%. Our IPP arm is beginning to generate substantial cash flow, which will help finance our growth going forward. Moving to 2023 guidance, we are pleased to issue our outlook for 2023, including revenues between $290 million-$300 million. Adjusted EBITDA between $188 million-$198 million. 1.8 GW operational by year end 2023.
Our guidance for 2023 is based amongst other on the following assumptions. Full COD of Vion by end of Q2 2023. Genesis Wind to reach COD by end of Q3 2023. Apex Solar to COD by the end of Q2 2023. Euro to U.S. Dollar of 1.04 and U.S. Dollar to shekel of 3.65. It is important to note that our Adjusted EBITDA estimate does not include the tax credit to be received at the COD of Apex Solar. We also note that following the reclassification of the Halutziot project, we still expect profits from the sale of electricity generated from the project treated as financial assets that are not reflected as revenue or Adjusted EBITDA to reach approximately $15 million in 2023.
We are pleased to also share project tables at the back of our earnings release and in Excel format on our website. These tables provide significant detail on our mature project portfolio, particularly projects under construction and pre-construction. We hope to provide best-in-class transparency on our business. It is important to note that our Adjusted EBITDA estimate per project does not include tax credits recognition and possess forward-looking information which is subject to the disclaimer provided in our annual release and in our project tables. I will now hand it over to Jason, who will get into detail a bit more on our U.S. projects.
Thank you, Nir. While I was part of the U.S. IPO roadshow, for those who haven't met me, I'm a founder, president, and CEO of Clēnera, based in Boise, Idaho. Enlight acquired Clēnera in August of 2021. This has been an exceptionally synergistic partnership as the companies share the same DNA, vision, and entrepreneurial spirit. The company is executing successfully across its U.S. project portfolio. Focus continues to be on progressing a large volume of projects to maturity through the development process. Apex Solar, located in Montana, is progressing as planned. Commercial operation date is expected by the end of June 2020. Atrisco Solar, located in New Mexico and totaling 360 MW DC solar and 1,200 MW or MWh of storage, commenced construction during the fourth quarter of 2022. Major equipment is ordered and the construction agreement has been executed.
All interconnection studies are complete. The draft interconnection agreement is underway and expected to be signed in April. The company is advancing negotiations with financing providers, debt, and tax equity. There are strong benefits for Atrisco under the Inflation Reduction Act, including PTC on solar tax equity and the possibility of a domestic content adder on the Battery Energy Storage System. COD is expected by mid-2024. The company has made significant progress on one of the largest projects in its portfolio, Co Bar. It's located in Arizona and totals 1,200 MW D.C. solar and 824 MWh of storage. The initial 580 MW D.C. of solar is contracted, and the remaining capacity, including storage, is in advanced negotiation with offtakers. The project has secured its primary real estate and conditional use permit. Impact study is complete and facility study is nearing completion.
Co-Bar is expected to start construction in second half of 2023 and achieve COD in phases through 2025. Like Atrisco, the Co-Bar project stands to benefit from the Inflation Reduction Act, including PTC on solar tax equity and the possibility of a domestic content adder on the Battery Energy Storage System. There is further potential to contract an additional 3.2 gigawatt-hours of storage at Co-Bar in the future as part of our land and expand strategy. Co-Bar is a good example of our land and expand strategy, where we have succeeded in securing large and cost-effective interconnect and developing one of the largest solar projects in the region. With respect to the supply chain, the company continues to de-risk its project portfolio.
The company executed an agreement with Waaree for up to 2 GW of modules with delivery through 2025. Together with other module procurement contracts, the company has clarity on meeting module supply needs for its mature project portfolio in the United States. Amidst increasing interconnection queue congestion across the United States, the company continues to see strong interconnection results, thanks to its advanced portfolio and market-specific knowledge. In the quarter, the company increased the projects beyond system impact study known as, that is the point at which we know interconnection cost and timeline by approximately 2,000 MW DC. With more than 8.4 GW DC of projects past system impact study, the company is positioned to accelerate its growth in the United States.
Given strong results across our U.S. portfolio, we are confident in our ability to deliver above market returns and above market growth. I will now hand it back to Gilad to discuss the company's European and Israeli projects.
Thanks, Jason. Enlight continues to benefit from the strong demand for power across Europe. Despite declining natural gas prices, natural gas remains significantly above historical levels. The steep increase in recent months in the price of carbon, recently eclipsing EUR 100 per ton, has kept thermal generation expensive. In the fourth quarter, Gecama, our merchant asset in Spain, sold electricity at an average net price of EUR 115 per MWh , 82% of which was hedged. Project Björnberget in Sweden, one of the largest onshore wind farms in Europe, totaling 372 MW, continues to progress with 26 turbines operational out of 60 as of the date of this release. 52 turbines are fully erected. In Sweden, we can generate revenues from the sale of electricity for operational turbines even before the project reaches full COD.
We expect Bjorn to reach full COD by the end of H1 2023. On the development front, Gecama Solar at 250 MW solar and 200 MW our storage project at the same site as Gecama, we'd advances as planned. With real estate and interconnection already secured, the project awaits its environmental and construction permits. Construction is expected to commence by the end of H2 2023, with COD expected by year-end 2024. Once the whole complex is built, we intend to reassess the commercial strategy and financing for the asset. In Israel, in the fourth quarter, we commenced construction on Solar + Storage 2, totaling 163 MW and 328 MWh of storage. Corporate PPA negotiation are ongoing, with COD expected over the course of 2024.
Genesis Wind, the largest renewable energy project in Israel, totaling 189 MW, has completed erection of all its wind turbines. Commissioning tests have begun, with COD slated for end of Q3, 2023. We also signed a collaboration agreement with NewMed Energy, the largest natural gas player in the Eastern Mediterranean, to develop renewable energy projects in the region. While we are market leaders in Israel, developing in Israel can often be slow and bureaucratic. Israel has ambitious renewable energy goals of 30% by 2030, yet the pace of development of projects is insufficient to achieve this goal. We believe that together with NewMed, we will be able to unlock projects of very significant scale and high returns outside of Israel's borders, with Israel as the ultimate offtake.
To sum up, we have never been better positioned or more excited about our business. Our U.S. IPO is an unmistakable signal that Enlight has become a major force in renewable power on a global scale. As you can see from our guidance, we expect another year of profitable growth in 2023, but that is just a small part of our story. Despite being public for more than 10 years, we are still in the very early stages of our opportunity. I'd like to thank our employees, customers and partners around the world for their support and we look forward to keeping investors updated on our progress.
Before we open the call up for Q&A, we would like to note that we intend to be active with regard to investor relations and plan to conduct a number of non-deal roadshows and attending various investor conferences after our first quarter earnings re-report in May. With that, I'll turn it over to the operator for questions. Operator?
Thank you. As a reminder, to ask a question, you will need to press star one and one on your telephone and wait for your name to be announced. To withdraw your question, please press star one and one again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Mark Strouse from JPM organ. Please go ahead, your line is open.
Yes, thank you very much, and welcome to the U.S. public markets. Can we start with just kind of looking at your mature portfolio and the pipeline that you have through the year-end 2025? Can you talk about the funding that you have in place, both from an equity perspective and from a debt perspective? You know, I know you already mentioned that you don't have any exposure to Silicon Valley Bank, but can you just kind of talk about your general views regarding your access to capital going forward?
Mark, I'll refer the question to Yossef and, I can complement it further on the capital side.
Thanks, Gilad. Mark, as you've seen from the disclosure, our mature portfolio now comprises 4.5 GW and 2.7 GWh of storage. The equity that we've raised in the U.S. IPO will be sufficient to finance the completion of the mature project portfolio from an equity perspective. Obviously, there are certain projects there we need to raise tax equity, and that project finance more broadly, but the equity for the mature portfolio is largely funded.
Yeah. I will just add to that, to the second part of the question, Mark, on our capital funding strategy. As you know, we base our capital strategy on four tracks. One of them only is equity raise, which we successfully completed recently. We are very excited about that. We do have increase in cash flow coming from the project. We just completed 2022 with $90 million of cash flow coming from operations. This is something that contributes to the growth of the company.
In addition to that, we have full flexibility also to raise through corporate bonds, which we've done very successfully in the Israeli market. We believe this is the edge of the company with its flexibility today, not only in the U.S. stock exchange, but also in the Israeli stock exchange. We can complement that always with minority sell downs at COD when projects, especially in the U.S., come to fruition. You know, we still hold 100% of the portfolio in the U.S. We believe there is significant upside that will reduce our equity check and further increase our return by performing from time to time, also minority sell downs and keeping the IPP model with the majority of the holdings like we do in Europe.
Okay, great. Just for a follow-up, you know, the industry continues to wait for the Treasury within the U.S. to give us more guidelines about the IRA. The longer that goes on, does that impact any of your project timing looking out over the next 18, 24 months? Then kind of similarly in Europe, does the talk about incremental incentives from here, does that potentially, you know, put things on hold for a period of time?
Yeah. Well, for the first part, Jason, why won't you take it and I'll complement on Europe.
Yeah, no, thank you. For the U.S., the lack of clarity is a challenge. However, much of that is around content adders, U.S. content adders, and other incentives beyond the baseline that we've already budgeted in our models. That is not, that is not a cause for delay on our projects. In fact, projects are proceeding as planned and on time.
Thanks, Jason. Just complementing on the Europe side. We've seen a huge growth in Europe this year, 34% in renewable energy installations. We see a strong push for renewable energy going forward 2023, 2024 because of the lack of energy in Europe and the low cost of renewable energy versus the traditional price setters in Europe. Currently, we believe that we will gain, and we will benefit from this increased need even before additional regulation acts in Europe. In the future, we are also attentive to the new incentive that may arise. We believe that this will only accelerate, but we don't see any freeze to the opposite.
Okay. Very helpful. Thank you.
Thank you. We will take our next question. Your next question comes from the line of Julien Dumoulin-Smith from Bank of America. Please go ahead. Your line is open.
Hey, good morning, team. Congratulations again, I should add. Welcome to you as markets indeed. I wanted to come back to the first point you made earlier around the increase in the 2026 and onwards targets here. Can you break down a little bit as to why now, and specifically, what data points led you to the outcome, including how do you think about the geographic breakdown of that pro forma 1.5 GW target now as you think about, you know, the contributors?
I can start generally, and then Jason, you can complement me on the details. On the overall, about 70% of our portfolio comes from the WECC states in the U.S., and we see increasing conversion of this portfolio into advanced phases in many areas. We see very strong indicators for our portfolio, and therefore, we see a higher level of implementation from 26 and on. Jason, if you want to complement me on the details on the breakdown.
No, that's great. Thank you. And great question, Julien. We have since the acquisition, we've been able to move 2.6 GW of projects to mature and advanced status. We now have 1.7 gigs in mature category here in the U.S., with 8.4 GW through system impact studies. Across the portfolio, things have accelerated. We're experiencing strong demand for our projects. In fact, over the last several months, we have been awarded through RFPs approximately 1.5 GW D.C. of solar projects and 2.1 MW, or 2.1 GWhs of storage. All of that is driving an increase of momentum across the U.S. portfolio, most of which is to Gilad's point, is centered in the Western U.S.
For example, we are planning to start construction on our Co Bar project here in second half, as noted already. That is for the first half of the project already contracted, roughly 600 MW of the total 1.2 gigawatts. The remaining 600 MW has been awarded through RFP and is in negotiation, advanced negotiation now. We expect to, over the coming months, announce a number of completed PPAs. Lots of momentum that is carrying us forward and giving support to increased guidance for future years. Again, much of that is located in the West, where we're benefiting from PTC and other benefits under the IRA. Yeah, thanks for the question.
Yeah.
Oh, sorry, go for it.
Julien, just to add into Jason, great input of 8.4 GW passes in impact studies. We were just in the roadshow presentation, and I suppose you remember that at this time, it was 6.5. We grew from 6.5 to 8.4 passes in impact studies on a short term, and I think this adds up to our confidence.
Got it. Specifically, if you can elaborate, you guys talked about some fairly large developments in PJM. I think there's more of a GW of potential development. Is that included in that '26 number? What is the status on that piece? Related, I know you gave some updates on Co-Bar and Atrisco here, but the expansions at those sites seem pretty meaningful and chunky. Can you just give us a quick update on potentially the commercial progress on those expansions, further expansions?
Yossef, you will start with the data and then Jason on Co-Bar.
Yeah. Thanks, Julien. For PJM, the gigawatt that we have there, that's not a 2026 COD. That's a bit after, driven by the Q reform. Maybe I'll hand it over to Jason Ellsworth to talk a bit about what we're seeing on the commercial strategy for the second phases of these large scale clusters we have in the West.
Yeah. No, thank you. The second phases of those large cell clusters are again, coming together well. On Co-Bar project, as mentioned, what we're looking at is completing contracts here in the second half. The intent is to have, to kick off our continuous construction here this year in the second half on the first bit of contracted projects with the intent to have maintain continuous construction through the end of 2025, achieving full COD on the 1.2 GW at that site through the end of 2025.
Following the strategy we have of really the pieces are coming together on this land in and expand with these large projects, where what we're doing is adjusting the seats at the table in such a way that we have efficiency on the EPC contracting and can emphasize sort of continuous construction without a mobilization and demobilization. For example, on Co-Bar, we'll be achieving COD at the beginning of 2025 on the first half that has already been contracted, and by the end of 2025 and in the second half, complete the remaining 600 MW through a carefully planned set of activities at the site.
Excellent, guys. Thank you very much. Appreciate it.
Thank you. We will take our next question. Your next question comes from the line of Maheep Mandloi from Credit Suisse. Please go ahead. Your line is open.
Hey, good morning. Thanks for taking those questions. Congratulations indeed on the IPO and coming to the U.S. markets here. Just speaking on the previous question here on the 1.5 gigawatt per year kind of rundown as you talked about, can you remind us how much of that is funded by the cash flows from the existing projects? Just trying to see if that would require any additional capital raise beyond what you kind of talked about here.
Yes. I'll refer the question to Yossef.
Thank you, Gilad. In terms of the 4.5 GW of mature projects, and 2.7 GWh, we're generating significant free cash flow from our existing portfolio of operational projects. We have, as you can see in the earnings release, a significant liquidity position as well, and we have access to additional corporate level facilities and the corporate bond market here in Israel. Through those sources, we will be able to reach the 4.5 gigawatts, and it gives us a lot of certainty on our funding plan to reach that project capacity and operational capacity. One thing to add is we've made significant progress on the Atrisco project financing, and we have significant confidence in our ability to secure project finance and tax equity across our U.S. project portfolio.
You will see in the tables in the back of our earnings release our equity assumptions that we've made per project, which is driven by some of the quotes we've received from lenders, and the equity requirement for each of those projects.
Yeah. Just adding to that, on a general note, you can see cost of CapEx for the project, which is roughly $1 billion for each gigawatt going forward. Today, with us benefiting from locations in the West and having the PTC track, we can get down to an equity check of 15% only, so $150 million per each new gigawatt. If we perform about 30% sell down of the project, we can get it down to around 7.5%, so $75 million per each gigawatt. This allows a lot of flexibility together with our, I think, very solid liquidity position right now.
Got it. Got it. Separately, just on the IRA here, can you just remind us what is the status of all the guidance you're expecting from the Treasury here on energy community or domestic content adders? Any timeline you're looking forward here?
Thank you. Jason, would you like to refer to that?
Yeah. No, I'll take that. Well, that is a wonderful question. I think we're all standing at the ready awaiting that guidance as mentioned. While that's really important to our upside, it is not necessary for the mainline track on projects. The baseline models do not include the upside on content. For energy community. We are hopeful that we'll achieve that upside. For example, on our battery supply, while we're not closing details on the battery supplier, for Atrisco, we are noting that the supplier is on track in meeting key milestones, including a ramp-up of U.S. supply.
We see a great deal of growing confidence in our ability to deliver a U.S. content equation on battery for Atrisco, which is further upside to our model. Like you, we're anxiously awaiting guidance. Gilad, anything you'd like to add to that?
No, that's perfect. Thanks.
Thanks. That's all for me. I'll take the rest offline.
Thank you. We will take our next question. The next question comes from the line of David Zales from Wolfe Research. Please go ahead. Your line is open.
Yeah, good morning.
Morning.
For my first question, for the potential PPA amendments, do you expect similar PPA increases as you've seen in the last year or so?
Yeah. I'll start, Jason, feel free to complement me. We are now negotiating additional PPA increases in the volume of 900 MW. We do see an upside and an opportunity to further increase PPA, and we do see PPA price continue to rise in the U.S., according to the data that arrived from the latest quarters. Jason, would you like to add to that?
Yeah, no. We have a volume of PPAs here in the U.S. that are continuing down that same path as Gilad has mentioned. We are consistently achieving the same 20% to 25% increase from those existing rates. When we note PPAs, that includes awarded projects, some of our historical awarded projects in the process of being negotiated. Those have all largely been adjusted in terms of rates. As we announce those numbers looking forward as those are contracted, what you'll see are the adjusted the numbers that have been adjusted upward, reflecting an increase in our ability to price in the marketplace. A lot of that ability to price is emphasized with our increased volume through system impact study.
What we're finding is that there are very few. The supply of projects that are interconnection ready and have advanced status in terms of land and permitting are in fact limited. There are very few of those and a great deal of which is giving us pricing power in the market. That continues. We're seeing that also in our on the FP side. Again, noting that over the last several months, we've garnered 1.5 GW of solar awards and another 2.1 GWh of storage, and we'll have more to announce in the next few months. Back to you, Gilad.
Thank you very much, Jason.
Great. Thank you for that. My last question, just what is the expected annual cash generation from your updated mature projects?
Yeah. Nir, would you like to refer to that?
First of all, from the unconsolidated basis, based on the current production and the generation of cash flow during 2022, as you can see in the financial, we generate around a $90 million cash flow from operating activities. Our shares is around 65%. We presume that, while all the mature portfolio will start a generation on a runway basis, will produce something around $150 million based on the current assumption. Our shares.
Great. Thanks. Okay. Thank you.
Thank you. Once again, if you wish to ask a question, please press star one and one. We will take our final question. Your question comes from the line of Justin Clare from MKM. Please go ahead. Your line is open.
Yeah, thanks for taking our questions. I guess, first off here, I just wanted to ask about your merchant exposure in 2023 and what you've kind of baked into guidance. You know, how much should we expect in terms of merchant sales? And maybe how much of that have you hedged today? And, and how are you thinking about hedging your merchant exposure, you know, either this year or even into next year?
Thank you very much for the question. I'll start, and then, Nir can complement me on the detailed data. In general, as you can see, our mature portfolio, is blend, within around 20% coming from merchant and 80% coming from long-term PPAs with, in the fact that in the U.S.-All our projects are for long-term PPAs on 100% of production. Going forward, we see, a declining, percentage of revenues coming from merchant. In Europe in the year of 2023, we might, see areas where in the blend, to some quarters it will be a little bit more than 20%.
What we see currently is that the level of prices of electricity in the market, in the forward and future for 2023 are much higher than our regional financial models. Even in the trend that we see, and by the way, we believe is positive of the stabilization of electricity prices in Europe and normalization of electricity prices, we still see levels that are significantly higher than the original financial models, driving higher returns on the project. Going forward, in the global perspective, we believe that this level of around 15% of exposure to merchant in selected markets with liquidity and good visibility towards the price setters in this market is going to provide a good hedge against volatility to the company.
Okay, great. That's really. Oh, go ahead.
Okay. Thank you very much.
I had one more, if I could sneak one more in here. You had mentioned earlier, you know, there are still some uncertainties that need to be resolved by the Treasury regarding the IRA and the tax credits. I was wondering how that's being treated in your tax equity negotiations. You know, is there any potential for tax equity investments to be delayed if the guidance is delayed and, you know, or are you expected essentially to be funded at kind of baseline levels and then there could be upside later, you know, if you do get the adders successfully?
I think as Jason mentioned, first, the baseline assumption of our coming projects like Atrisco or flagship projects, around $900 million projects, in terms of CapEx, are based on the current incentives that provide very high return, solid double digits. Potential upside from energy community and the domestic content will only add to that if they occur. While currently, we negotiate on the tax equity on Atrisco, PTC track for the solar and ITC track for the batteries. This is the base case. We believe that in case we can be on time with domestic content on the batteries, we might have these adders even as early as in Atrisco already, and maybe also the energy zone.
These are all upside on top of a very solid return on this project. Going forward, we do build a strategy that will allow us to gain the adder for the domestic content on the battery. On several positions of the company, we believe that we have a nice potential also in the energy zone, but we will wait for that.
Okay, great. Thank you.
Thank you. I would now like to turn the conference back to management for closing remarks.
We are very excited to be here on our first call. Thank you everybody for your time. We are very positive, as you saw, on all main indicators of the company, both for the performance we've shown in 2022 and also the guidance that we provided for 2023 that shows an additional increase of more than 50% in the main indicators. Summary that we are looking forward to our next quarterly meeting. Thank you.
This concludes today's conference call. Thank you for participating. You may now disconnect.