Good day, and thank you for standing by. Welcome to the Enlight Q3 2023 Earnings Call and webcast. At this time, all participants are in a listen-only mode. After the speaker's presentation, there'll 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 Leshkovitz, VP of M&A and Corporate Finance. Please go ahead.
Thank you, operator. Good morning, everyone, and thank you for joining our third quarter 2023 earnings conference call for Enlight Renewable Energy. Before beginning this call, I would like to draw participants' attention to the following.
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, discussions with commercial counterparties and financing sources, progress of company projects, including anticipated timing of related approvals and anticipated production delays, expected impact from various regulatory developments, completion of development, the potential impact of the current conflict in Israel on our operations and financial condition, and company actions designed to mitigate such impacts, and the company's future financial and operational results and guidance, including revenue and Adjusted EBITDA, are forward-looking statements within the meaning of U.S. Federal Securities Law, which reflect management's best judgment based on current and available information. We reference certain project metrics in this earnings call, and additional information about such metrics can be found in our earnings release.
These statements involve risks and uncertainties that may cause actual results to differ from our expectations. Please refer to our annual report filed with the SEC on March 30, 2023, and other filings for more information on the specific factors that could cause actual results to differ materially from our forward-looking information. 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 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 website.
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 the call over to Jason for a review of our U.S. activity, and then to Nir for a review of our financials. Our executive team will then be available to answer your questions.
Thank you, Yosef, and thank you all for joining us today. Before talking about the business and our quarterly performance, I would like to address the current situation in Israel. Over a month ago, Israel was brutally attacked by a terrorist organization and now finds itself in a state of war, with the aim to defend its civil population, as well as the values of freedom and democracy. Given all the extreme events taking place in our country, we are quite proud that Enlight has succeeded in maintaining its normal operations and, in parallel, engaging in support for our society with extensive community outreach and acts of goodwill during this difficult period.
It's a tribute to our employees and our company's values that we are able to maintain our commercial growth and success, while at the same time looking after families and small businesses that have been affected by the war. In terms of our operational projects in Israel, all are producing power hardly without interruption. Moreover, our geographically diversified portfolio is a source of strength for our company. In the first nine months of 2023, 74% of our revenues were generated in Europe and in the U.S., with the remaining 26% in Israel. Moving on to a discussion of our business, Enlight results for the third quarter and nine months were solid. Third quarter revenue grew 3% year-over-year to $58 million. Net income grew 35% to $26 million, and adjusted EBITDA grew 32% to $47 million in the quarter.
Revenue for the first nine months of 2023 grew 39% year-over-year to $182 million. Nine-month net income grew 201% to $82 million, and Adjusted EBITDA grew 64% to $142 million for the nine-month period. We also saw significant growth in our operating cash flow, which reached $31 million during the quarter and $126 million for the first nine months of 2023, an increase year-over-year of 57% and 135% respectively. Continuing our momentum from last quarter, we are pleased with the progress made on project Björnberget in Sweden, which has reached full production. On the back of solid third quarter results, we reaffirm our full-year 2023 guidance.
Before Jason and Nir go deeper into our project and results, I would like to focus on our company's two main objectives: delivering above-market project returns and delivering above-market growth. First, let's discuss returns. In recent months, there has been a growing debate among investors as to whether project returns are high enough to withstand rising interest rates. This concern has grown in light of recent announcements from several major companies in the renewable energy sector, cutting their outlook, whether across offshore wind, residential solar, or utility income. I would like to tackle these concerns head-on and be very direct. Project returns at Enlight remain robust and are increasing. This has been achieved through our clear and defined strategy, which includes: one, amending existing PPA pricing higher, while driving pricing significantly higher on newly signed PPAs.
2, remaining nimble on supply chain, enabling us to capture the value of rapidly easing costs across solar panels and batteries. And 3, reaping the benefit of the IRA, which uniquely favor our portfolio. I will now provide details on each of these points. First, we amended over 1.8 GW of legacy PPAs in the past 18 months, with price increases on average of 25%. There are several more amendments currently under negotiation. Moreover, on newly contracted projects, PPA pricing has moved higher. During the third quarter, we signed PPAs in the U.S. at prices on average 25% higher than what we were seeing a year ago. Similarly, in Europe, we signed an inflation-linked 15-year CFD at close to EUR 70/MWh. How have we managed to amend existing PPAs and drive new PPA pricing higher? With our interconnection advantage.
Put simply, we are uniquely positioned to deliver large-scale renewable energy projects to utilities who urgently need power now, and our customers are willing to pay. Second, we have secured a competitive advantage in supply chain. While many have opted to lock in module supply in the U.S. through long-term arrangement at a very high pricing, we chose to enter into flexible contracts that enable us to capture the value of wafer price decline. As a result, today in the U.S., we can buy up to 2 GW of panels at less than $0.30/W. We were modeling between $0.36-$0.40/W across our U.S. projects just a few months ago. In Europe, the decline has been more dramatic. We can acquire panels today in Europe at less than $0.20/W.
Similarly, battery container pricing has come down dramatically in the last three months from $250 to $180 per kWh that on average, a nearly 30% decline. In short, some in the sector have been dragged down by legacy PPAs, which have not been amended, coupled with take-or-pay equipment contracts at high pricing. On the other hand, we've been able to generate significant operating leverage from declining equipment costs while pushing PPA prices higher, driving robust project returns. Finally, we are reaping the benefit of the IRA in the U.S. In addition to the increased tax equity we can raise on projects under the PTC track, which benefits our West State focused portfolio. We also stand to benefit from tax credit adders. Approximately one quarter of our U.S. projects are eligible for the energy community adder.
The most recent examples of this are Atrisco, Quail Ranch, and Rustic Hills, all of which are in our mature portfolio. Putting this all together, based on the above factors, we are now modeling a substantial improvement in the returns we expect to generate from our 3.6 GW and 5.5 GWh of projects that are expected to COD between 2024 and 2026. This portfolio is now expected to generate an unlevered ratio of around 10%, approximately 80 basis points higher than our expectation for models we prepared in the second quarter. Even in a higher base rate environment, with this unlevered returns, we expect to deliver healthy mid-teen levered project returns. And to be very clear, our focus on returns is a fundamental feature of a joint developer and IPP business model.
The alignment of interest that results from both the developer and IPP being under one umbrella, means that Enlight is focused on developing projects that our internal IPP can profitably hold. Driven by these strong project fundamentals, we aren't giving up on our growth. We are continuing to accelerate it. We reached commercial operation on 256 MW of generation and 90 MWh of energy storage during the quarter, including Genesis Wind, the largest renewable energy project in Israel. We have thus completed the entirety of our plan to reach 1.8 GW of operational generation by the end of 2023. We also made significant strides on the conversion of our development portfolio.
We added 530 MW and 1.3 GWh to our mature project portfolio, including Country Acres, a new and substantial project in California, as well as Quail Ranch, the second phase of our flagship Atrisco project. Both projects, which have signed PPAs and signed interconnection agreements, are targeted for commercial operation in 2026 and 2025, respectively. However, I do want to note that we are now expecting a delay at Project CO Bar, which is expected to COD in 2026 versus our original expectation in 2025. The delay has been driven by an interconnection queue reform being implemented by APS in Arizona, which will delay the receipt of our interconnection agreement. To compensate for the delay, we've been able to accelerate some of our other major projects from 2026 to 2025, highlighting the depth of our development engine.
Jason will elaborate more on CO Bar and our plans for 2025 and 2026 in the U.S. Finally, to deliver above-market growth and above-market project returns, we are working also to optimize the access to high-quality capital and debt. We are in the final stages of achieving financial close on two major projects, the solar portion of Atrisco in the U.S., as well as the solar plus storage cluster in Israel. In total, we expect to secure above $500 million of project finance. We hope to be able to update you in the coming weeks as we complete each of these transactions. Post-closing, we expect to recycle $300 million of excess equity invested in this project back to Enlight.
The capital we got from this project, plus the cash we have on hand and cash flow we expect from operational project, is expected to provide us with the equity required to deliver a total operational portfolio of 4.6 GW and 3.6 GWh, extending into 2026 CODs. To fund further growth thereafter, we expect to execute on our capital recycling strategy, selling down minority stakes in projects. We began to execute this capital recycling strategy during the third quarter. We sold off our 10% stake in Faraday, a 680 MW pre-NTP project in Utah, for $190,000 per MW, obtaining $13 million of capital for future use. We also sold our 50% share in several small operation projects, totaling 25 MW in Israel for $6 million.
These transactions, while small, nevertheless illustrates the potential to unlock value and growth capital through sell downs. In summary, we see attractive fundamentals in our business, pricing power for our projects, and easing supply chain and access to project finance, which will all enable us to deliver on our twofold objective of above-market project return and above-market growth. I will now hand it off to Jason, who will provide more details on some of our U.S. projects.
Thank you, Gilad. In the U.S., project fundamentals remain strong, PPA prices are increasing, and equipment pricing is falling. At the same time, we are making steady progress in growing and advancing our project portfolio. Against that positive backdrop, it is likely that our flagship CO Bar project will be delayed approximately one year due to an interconnection queue reform by Arizona Public Service. Construction on the solar portion of Atrisco in New Mexico, comprising 364 MW, remains on schedule. All major equipment is on-site, our project racking is 99% complete, and 96% of modules are installed. We plan to achieve COD at the beginning of the third quarter of 2024. As Gilad mentioned, we've materially finalized the definitive documents required for project finance on the solar portion of Atrisco, including term debt and tax equity, and closing is expected imminently.
However, the storage portion of Atrisco, comprising 1.2 GWh, is now delayed due to supplier issues. COD is expected during the fourth quarter of 2024. We are evaluating the possibility of a change of storage supplier to meet project timelines and bank financing requirements. In parallel, we are expanding the potential of our Atrisco complex under our land and expand strategy. We are pleased to announce that in October 2023, we signed a PPA with PNM, the current offtaker of Atrisco, for an expansion of Atrisco. The new project, called Quail Ranch, is sized at 120 MW of solar and 400 MWh of storage. The project will benefit from Atrisco's completed development status and therefore has been added to our mature project portfolio this quarter. Moreover, like Atrisco, Quail Ranch will benefit from an energy community tax credit adder.
Under our land and expand strategy, we can reduce risk and compress development timelines while increasing returns. We plan to start construction in 2024 and achieve COD in 2025. In addition to Quail Ranch, we also added a large new project to the mature portfolio this quarter, called Country Acres. Located in California, it is sized at 392 MW of solar and 688 MWh of storage. We recently executed a PPA and interconnection agreement with Sacramento Municipal Utility District. The solar is contracted for 30 years and storage for 20 years under busbar agreements. Clēnera has a long history of project development in California, and we are excited about this new major project and the quality of our partner. We expect construction on Country Acres to begin in 2024 and commercial operations in 2026.
Finally, we expanded our Roadrunner project with Arizona's AEPCO by additional 44 MW of solar and 140 MWh . We continue to work with AEPCO to meet their growing need for clean and reliable power and capacity. In total, between Quail Ranch, Country Acres, and the Roadrunner expansion, we added 556 MW of solar and 1,228 MWh of storage to our mature portfolio in the U.S. during the quarter. On CO Bar, our 1.2 GW solar and 800 MWh storage project located in Arizona, we expect to see a one-year delay. As Gilad mentioned, in September, Arizona Public Service enacted a reform of its interconnection queue process. The reform changes APS interconnection study review from a first come, first served basis to a first ready, first served approach.
While CO Bar's real estate permitting, offtake, and system impact study are already secured, it is expected that the revised process will cause an approximate one-year delay to the project. As a result, we have moved the project's expected COD from 2025 to 2026. We are working with our partners in the state to try and shorten this delay, given the project's advanced status. To help offset the impact of the CO Bar delay, we are accelerating the scheduled COD for Roadrunner. That's 294 MW of solar and 940 MWh of storage from a 2026 to a 2025 COD. As I mentioned a moment ago, Quail Ranch, including 120 MW and 400 MWh, entered the mature project portfolio and is also expected to reach COD in 2025.
These projects are both mature and well suited for 2025 completion. While we are disappointed with the delay to CO Bar, the depth of our development portfolio affords us the ability to be nimble. Recapping, we are encouraged by our team's progress in the development and construction of our U.S. portfolio. Where there are delays, we are advancing other portfolio projects to fill our schedule and continue to deliver strong results. Our projects are well-sited and well-developed, evoking strong demand from offtakers, and we are benefiting from falling equipment prices. Overall, project returns are robust, and we are encouraged by the strength of the U.S. market. With that, I'll turn it over to Nir to review the company's financials.
Thank you, Jason. In the third quarter of 2023, the company's revenue increased to $58 million, up from $56 million last year, a growth rate of 3% year-over-year. Growth was mainly driven by the revenue contribution of new operational projects and inflation indexation embedded in PPS for already operational projects. This was largely offset by a decline in revenues at Gecama year-over-year, driven by lower electricity price relative to the price observed in the same quarter last year. Since the third quarter of last year, 544 MW and 81 MWh of projects started selling electricity, including Björnberget in Sweden, Apex Solar in the U.S., AC/DC in Hungary, and several small solar and storage projects in Israel. These projects collectively contributed $8 million revenue during the third quarter of 2023.
The biggest contributor was Björnberget, $5 million, which is now operating at full production. Israel revenues fell year-over-year by 38%, $8 million year-over-year, driven by lower power price relative to last year's peak electricity pricing. Finally, the company also benefited from inflation indexation embedded in its PPAs, which contributed an additional $3 million of revenue during the quarter. This reflected on average indexation of 7.2% across 592 MW of PPAs for projects that have been operational for a full year. Net FX impact was immaterial to results for the quarter. Net income increased to $26 million, a growth rate of 35% year-over-year. There was a non-cash benefit of $8 million this quarter, attributed to the mark to market of interest rate hedge. The company entered into ahead of financial close process at-risk.
The residual change in net income was driven by a reduction in the expectation for earn out payment linked to the acquisition of Clēnera of $12 million, compared to $18 million reduction during the same period in 2022, and gain recognized on project divestitures of $8 million. In the third quarter of 2023, the company adjusted EBITDA grew by 32% to $47 million, compared to $36 million for the same period in 2022. Aside from the factors which affected our revenues growth, important items included gains recognized from project divestiture and the final $2 million installment of compensation payments from Siemens Gamesa, linked to the delay in reaching full production at Björnberget. With respect to the divestiture, the company sold its 10% stake in the Faraday solar project in the U.S. for $190,000 per megawatt.
We recognize a gain of $3 million in the third quarter and expect to recognize an additional gain of $2 million in the fourth quarter. Similarly, the company sold fifty percent of several small operational projects in Israel for $465,000 per megawatt, recognizing a gain in the third quarter of $5 million. This gain were offset by a $1 million increase in overhead. Moving to 2023 guidance, we are pleased to reaffirm our full year 2023 outlook provided last quarter. We expect annual revenues between $265 million-$275 million, with adjusted EBITDA between $188 million and $199 million. Looking to our balance sheet, Enlight engaging a number of capital raising transactions during the quarter.
In September, the company raised ILS 390 million, approximately $84 million at the time, of unsecured corporate debt in Israel at an effective rate of 5.8%, expanding on the existing senior unsecured, 6 Series. We have also been working to achieve financial closing on both Atrisco Solar in the US and our solar plus storage project in Israel. We have almost reached the finish line, as definitive, documents has been finalized. We hope to be able to update you in coming weeks as we close each of these transactions. The combined sum of these two transactions is expected to be more than $500 million. From this amount, there is more than $300 million of excess equity capital, which we expect to recycle back to Enlight.
This transaction should further strengthen our balance sheet, reinforcing the financial footing needed to deliver the future growth of our business. Finally, as of the end of the quarter, we had $170 million of revolving credit facility at several Israeli banks, of which $110 million remain undrawn. The facilities provide us with additional financial firepower and flexibility as we allocate equity investment in projects and optimize project financing over time. In conclusion, we benefit from a strong funding position and access to capital, with clear plans to deliver on our mature portfolio. We are executing well, and we are very excited about the future. With that, I will turn it over to the operator for your question. Operator?
Thank you. 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. We will now go to the first question. One moment, please. Your first question comes from the line of Mark Strouse from JP Morgan. Please go ahead.
Yes, thank you very much for taking our questions. Jason, I'm wanting to go back to the, the interconnection reform with the, the CO Bar, project. Thanks for the color there. Can you? When you look at your other projects that are pending over the next few years, let's say, are, are there other utilities, other, you know, states, you know, kind of any, any level that are looking at similar reforms? And, and how, how do you think about the risks on, on some of the other projects?
Yeah, that's a great question, Mark. We're watching that carefully across all of the utilities. The fortunate thing is, we have such an advanced status across all of our portfolio, including approximately 10 GW of solar. And that has put us in a position to be well out ahead of changes. The impact on CO Bar is procedural, and as we work through that, certainly that has a delay, but it is not impacting the remainder of our remainder of our projects in Arizona. So it's very specific to CO Bar, and we don't currently see a risk to our other projects in terms of interconnection queue reform and changes there.
Of course, there are overall delays in the market in terms of queue, and projects that are sitting in the back of those queues are seeing delays. Many of those are seeing significant delays if they are to be successful at all. Projects that are at the head of the queues, as much of our portfolio are, advancing and continuing to move forward. We're also continuing to use, as we've said in the past, engineering and procurement agreements with utilities in order to accelerate the process that allows the utility to advance the work on their side, in advance of having the facility studies complete or in advance of an LGIA, in such a way that project timelines are benefited.
Okay. Thank you, Jason. And then a follow-up, probably for Gilad. You know, obviously, want to be sensitive to the what you know, what's happening in Israel right now. But I do wanna ask if there have been any employees that have been called up for service, you know, kind of how we should think about what roles might be impacted there and kind of your ability to backfill for that. Thank you.
Yeah. Thank you very much. It's a great question. So, I will start with the answer by saying that what we see in Israel right now is that we continue, we are able to continue the operations of our all our sites in close to 100%, and despite all the events. In terms of the employees, so first, as a matter of figures, so about 45% of the total employees of the group are located in – in Israel, 120, more or less, out of close to 300.
About a quarter of them are either in reserve service or spouses of people that are in reserve service. But the remainder of the employees are supporting all the operations. So we are very confident and but also very proud in our employees, in the way they are handling the situation, and also in parallel, supporting the civil society in many, many actions that we are doing to support other businesses and also civil populations. We feel that this is part of the values of the company, and we are doing it without affecting the business side.
Okay. Best of luck. Thank you very much.
Thank you. We will now go to our next question. The next question comes from the line of Julien Dumoulin-Smith from Bank of America. Please go ahead.
Hey, guys, it's Alex Vrabel for Julien today. Thanks for taking our questions. Wanted to press a little bit more just on the sort of financing environment that you guys are operating in. Obviously, at Atrisco, good to see that, you know, sort of fully termed out and ready to close at this point. I believe that it's still a little bit delayed from your expectations. And beyond just the sort of back and forth between investors and counterparties across the space on returns, there's also been a lot of debate around ability to get tax equity, the transfer market, and the evolution there. I'm just curious if you can kind of give us what you guys are seeing the latest.
Do you expect to use PTC or ITC transfer deals here forward? And if you can add, I mean, how would that impact the return profile that you guys sort of elegantly laid out at the beginning of the call, relative to sort of your underwriting assumptions? Thanks.
Yeah. So first, I'm very happy to update that we did close already the tax equity transaction for the solar portion of Atrisco with Bank of America. It's a major transaction and an important milestone for the project, and I hope that in the coming days or weeks, we're gonna close also the debt side of the project and the solar side of it. And then we go for the next milestone of closing tax equity and debt for the battery storage project. So first, in terms of Atrisco, we are very confident in executing the project finance and tax equity for the project. The suppliers are there of the equity and the debt, and it's more about the operation of the facility agreements in the current environment in the U.S.
We are working very closely, closely to optimize also the financial terms of the deal in order to make sure that we keep executing on profitability also. And I think this is also shown in our quarterly numbers, where profitability has increased, and this is what we're doing in Atrisco. So I agree that there is around a one project, a one quarter delay, but I think we are very confident. And as you see, the project is advancing both in terms of its construction and also in terms of financing.
Alex, Yosef here, just to touch on the strategy, kind of in terms of underwriting for the longer term. When we model our projects, particularly for the strategic ones, we're looking to use tax equity in the places which are strategic for us, so the large scale, very material projects in our portfolio. When we look towards some of our projects, which may be smaller, we may look to transferability for both ease of execution and liquidity of that market. So we believe we have to access to the tax equity market, but we also want to be selective and use that tax equity for the projects which are most important and meaningful for us.
Got it. Yep, makes a ton of sense, given the backdrop and the amount of demand out there. On the other side, I mean, congrats again, I guess, on the amount of PPAs you guys sort of continue to reprice and renegotiate. Again, wanted to ask, you know, this is another sort of key debate in the space: How do those discussions go, you know, for you guys, and also sort of what are you hearing across the space? Obviously, you operate in mostly a physical power market, others do some things around virtual PPAs, et cetera.
I'm curious, sort of like, what you're hearing from your customers when you go back to them, for those things, what you're hearing from others, and how you expect that to evolve from here, given the sort of push-pull of higher rates against much lower equipment costs, that you guys alluded to at the beginning of the call. Thanks.
Yeah, maybe I can start, Jason, and then you can complement me. Okay?
Great.
So, so I would say that first, it's very important to reiterate, as we said in previous quarters, that all the discussions we are doing with the utilities on the repricing are doing in goodwill and in mutual interest. There is nothing that is legal about these discussions, and I think this means that there is a mutual interest. And the interest is to see project that are becoming operational soon because the utilities need the electricity. And as we all see, there are some delays in the market. So whenever projects are more ready to get constructed and to support the need of the utilities, I think there is a strong support from the utilities to help them get there. And it is true that prices of equipment are going down.
From the other side, still, the prices of electricity in the market, which are the alternatives, are much higher, and also interest rates are still very high. So I think this still support, I would say, this kind of actions that we are doing, and we are still seeing also new PPAs that we've signed in the last quarter that were they were 25% higher than the price of PPAs on average that we closed on, comparing the period last year. So we see that the environment of PPA pricing in the market is also influencing our ability to reprice.
Thanks, Gilad. Yes, I would reiterate that project readiness is a key characteristic of those discussions right now. It is so important to the utilities to have line of sight to projects coming onto the grid, supplying the needs of their customer base. And so in that environment, we've found a lot of support for repricing, though those conversations are never easy. They're done respectfully and carefully with the utilities, considering their needs and the needs of the project. And we have been consistently successful in that.
We are not looking to advance those beyond what the needs of the projects are in terms of obtaining the increases that are necessary to keep pace with the inflationary environment that the especially rate in inflation. But with that in mind, the utilities have been very understanding and helpful in that process. And as Gilad has noted, even our new PPAs are seeing roughly the same level of increase versus some months and even years ago. So at a roughly 25% average increase across the board, we continue to find reception and support from utilities, though, as mentioned, those discussions are carefully orchestrated and done respectfully with the utilities.
They're not easy, but they are and have been successful.
Got it. Thank you, guys, so much. I'll take ourselves offline.
Thank you. Once again, if you would like to ask a question, please press star one and one on your telephone keypad. That is star one and one to ask a question. We will now go to your next question. Your next question comes from the line of Justin Clare from Roth MKM. Please go ahead.
Yeah, hi. Thanks for taking our questions here. So I wanted to go back to the, the CO Bar project. So it sounds like it's now planned to be completed in 2026. So just wanted to understand a little bit better, the potential for that timeline to change, whether it could be accelerated back into 2025 or what the risk is that it could be delayed into 2027. And then, wondering, you know, what you're waiting on in order to be able to start construction for that project. So that'd be helpful. Thank you.
Jason, would you like to take that question?
Yes. Thank you, Gilad. Thank you, Justin. That's a good question. So in, in terms of, the delay, by way of specifics, there is a cluster-type process that is proceeding, and in that process, the timelines, if, if reasonably, measured out, will put the project into 2026. We are comfortably into 2026. We are working together with the utility and our offtake. APS is the interconnection utility. The offtake, the primary offtake on the CO Bar project is, is, SRP. We also have a, a, offtake contract with APS at that site. With, with all of those parties, we are discussing the potential to accelerate, given the advanced nature of this project. Affected systems studies were completed already, by all affected parties.
And so there is potential that the project can be accelerated, given its readiness. We don't have details on that. It is unlikely right now that the project would be accelerated so much as to move it back into 2025, but the current timelines point to a comfortable completion in 2026. Regarding-
Got it. Okay.
The potential... and Justin, you asked about the potential to accelerate the build on that project or start construction and what might gate that. Of course, the interconnection timeline is important for that, for purposes of timing out the project. And we have already- begun engineering and procurement with, with the utility. So we executed an EPC agreement with APS already, and so there is certain, certain level of procurement and work that associated with the interconnection that has already begun.
Okay, great. That's very helpful. And then, just shifting gears a little bit here, so you closed the tax equity portion of the financing for the Atrisco project. I was wondering if you could share how much of the project CapEx could be supported by the tax equity investments. And then is that project, did you elect for the PTC there? And then were you able to also secure the energy community adder as a part of the tax equity investment? And then when we look to future projects, you know, if there are projects that are similar to this with the PTC and energy community, would you expect similar terms for tax equity investment?
So thank you for that, Justin. So the P-- it's a PTC deal, just given the generation profile and where it sits in New Mexico, naturally. The adder is not part of the PTC quantum. It is something that we will be monetizing ourselves through the transfer market. And the base tax equity check basically reflects around 50%, a bit north of 50% of project CapEx.
Got it. Okay. And then the timing of monetizing it in the transferability market, what would that timing be? Is that? Does it need to be closer to COD or after COD, or?
Yeah, that's exactly right. That's exactly right.
Okay.
That would be closer to COD.
Okay, got it. And then one other one, just on the, the capital recycling. So, so this quarter, you had completed some minority sales. Was wondering if you could just speak to your plans for, either the remainder of 2023 or 2024. Any meaningful, you know, sized projects that you're looking to, complete a minority sell down in? And then, are any of your project timelines dependent on, completing those, sell downs in order to, acquire the equity capital?
So thank you. I will start by saying that there is no project timeline that is dependent on any sell down. With the equity that we have right now in hand, we are fully funded to construct the whole mature portfolio pipeline, which is about a 4.3 GW plus a significant amount of storage. This is, you know, the first part. The second part is that we do, I would say, both part of our strategy is to perform sell down in 2024. I don't see additional material sell down 2023, but 2024 is part, I would say, part of our strategy would be to perform sell downs.
In order to improve the profitability and also recycle equity for the future projects. Because we will continue to grow also towards 2026, 2027, and we would like the sell downs and the equity that we recycle through sell downs to be part of our resources. And by doing that, really minimize the need of equity from the market.
Okay, thanks very much.
Thank you. We will now go to our final question for today. The final question comes from the line of David Paz from Wolfe. Please go ahead.
Hi, can you hear me?
Yeah, we can hear you, David.
Oh, thank you. Yeah, I just wanted to touch back on the Atrisco storage supplier delay that I believe you mentioned. Are you... Well, first, maybe any more color you can give, that you didn't address on the call, and then are you using that same supplier for your other storage, for your other projects, that have storage? And if so, which projects?
Okay. Thank you for the question. First, I will say that currently we're optimistic not to have delays in the supply of the storage part in the project. We are considering replacement of the battery supplier in the project, while the EPC will remain the same in order to meet or to be more confident in meeting the timetable of the project and some financeability that will be improved. But we are confident on the ability to deliver the project on the time framework that we are estimated. Regarding the future, the second part of the question was on future projects. So as always, as part of our supply strategy, we are working with multiple suppliers without exclusivity to any supplier.
So we do work also with other channels, not only in this project, but in the future project. So we have the flexibility to do the same thing also in the future project.
Got it. Thank you. Then just given some of the project shifts that you mentioned, some pushed out, some brought forward, do you still anticipate the same EBITDA growth rate? through 2026, as you did, you know, say, a quarter ago? And do you also anticipate, and do you anticipate any new common equity through 2026?
So thanks for the question, David. So what we've articulated, and you'll see it in the release as well, that we have sufficient equity to, in terms of the capital we have on hand, plus recycled capital, we have enough for 4.6 GW and 3.6 GWh . Anything in excess of that, we intend to focus on our capital recycling strategy, the minority sell downs and some of the dispositions that we've outlined. And remind me, what was your first question?
Just, do you still anticipate the same, you know, EBITDA growth rate through 2026?
Yeah, so if we look at— Yeah, so thanks for that. So we've obviously accelerated some of the projects, roughly 400 MW and 1.3 GWh of projects from 2026 to 2025. Obviously, that doesn't account for the full delay of the CO Bar project to 2026. But again, as we look towards the end of 2026, the growth is just more back-ended, as CO Bar will come in 2026, and we'll be benefiting from the growth of that project in 2026.
Thank you.
Thank you. We do have a follow-up question. One moment, please. And the follow-up question comes from the line of Julien Dumoulin-Smith from Bank of America. Please go ahead.
Hey, guys, apologies. Just wanted to get one quick follow-up here, if I can. Just on the panel prices you alluded to, and sort of the cost items, curious, like if that's sort of what you're seeing across the broader market, or you think that's somewhat unique to some of the supply contracts that you negotiated, I think, you know, over a year ago, with some parties in India or otherwise. And how are you planning, you know, to sort of, I guess, expand that panel strategy into the coming years, given the amount of, you know, sort of construction or execution that you guys have ahead of you? Thanks.
So I would say, and I can start, Jason, then you, again, can complement me. So first, I would say that in an existing contract with where we were able to benefit from the reduction in prices, although the contract was already signed because it had some linkage mechanism to the price of polysilicon. So I think this was a very strong upside we got from the wise supply chain strategy we conducted. And on the broader term, yes, we do see the panels price dropping off on the broader market, also internationally, maybe even more dramatically internationally.
So going forward, we believe we'll continue to benefit from that on being able to do that also on the existing projects that we are entering into construction.
Thanks, Gilad. I would add that the India contract was structured in such a way that it was indexed to certain floating prices in the industry, and we have benefited from that. That indexing also provides an anchor for our other negotiations. And so we are seeing similar pricing levels from alternative suppliers, other supplier relationships that we have, and that is benefiting multiple projects beyond the existing India contract.
So we expect to see broader application of those prices and that benefit across the portfolio, and are going to, as we look forward to the coming years, we continue to expect softness in pricing in terms of modules, given the module supply situation across the industry, as it impacts our business here in the U.S.
Got it. Yep, makes sense, given kind of what we're seeing as well. And just one last one as far as I know, I asked about the, the renegotiation, and, and sort of how those discussions go earlier. I'm curious also just... I mean, you guys have alluded, I think, mostly to the, the solar end of it or the generation stack. On the capacity side, we're seeing some really robust, pricing there. I think frankly, it's almost counterintuitive to what you would see on the, the cost deflation side for batteries themselves. I'm curious if you're seeing the same, and then sort of how, capacity prices or, or tolling agreements, if you will, on storage, have evolved in parallel, around these, you know, rate gyrations and, and the cost of equipment movements.
Jason, why wouldn't you take it?
Yeah, I'll be happy to take that. No, and thanks for pointing that out. It is a really good time for capacity, especially in the West, and over two-thirds of our portfolio is focused in the Western United States, where capacity is in great demand, and those markets have advanced rather rapidly. We are seeing significant demand that is having a positive impact on rates, especially as we are negotiating multiple contracts and continue to see a demand with every solar contract we're seeing here in the West, demand for capacity. The one fundamental driver for that is the limited interconnection capacity that's there.
So, when we have a solar project or other interconnection capacity, the utilities are looking for the opportunity to put battery on there, and the demand remains super strong. We will continue to have some positive announcements as it relates to battery as we move forward. As you can see from the information shared here today, a lot of battery attached to the solar that we are announcing.
Got it. All right. Thanks, I appreciate it. I will definitely take the rest offline this time, I promise. Have a good one.
Thank you. I will now hand over to Gilad Yavetz, CEO and Co-Founder of Enlight, for closing remarks.
Thank you, operator. Thank you everyone for your time. We see strong fundamentals for our project and are excited about the year ahead as we execute an above-market project returns and above-market growth. Thank you. See you next quarter.
Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.