The chief executive of Dublin-based Mainstream Renewable Power has said the wind and solar power developer sees “strong opportunities” for deals on projects in its portfolio that would allow it to recycle capital.
The comments came as Mainstream’s Norwegian parent, Aker Horizons, revealed that the Irish unit’s pretax profit narrowed in the first half of this year. They also follow a report last week that Mainstream has hired investment bank Rothschild to find an investor for its pipeline of South African interests. The company has declined to comment on this.
“As we move forward, we continue to see strong opportunities for capital recycling and consistent value creation,” said Mainstream chief executive Mary Quaney on a call Oslo-listed Aker Horizons hosted for analysts on Tuesday morning.
Recycling of capital in the sector typically comes from selling stakes or the entirety of certain projects to help fund others in development.
Mainstream’s pretax loss narrowed to 1.05 billion Norwegian krone (€89 million) for the first half of 2024 from 6.11bn krone for the same period last year, with the performance for 2023 driven by impairment charges against problem assets in Chile.
Mainstream has booked the equivalent of about €870 million of writedowns against Chilean assets — known as the Andes Renovables onshore wind and solar platform — since the start of 2022 due to various problems in that market.
However, it managed to restructure more than €1.1 billion of Andes Renovables debt last year — stabilising the business. Andes Renovables, which has 1 gigawatts (GW) of fully operational energy capacity in place, has delivered a positive gross profit margin in each of the last four quarters, according to the group.
Mainstream recorded the equivalent of €96 million of revenues during the first half, with a fifth of that coming from the booking in the second quarter of catch-up payments due on local power supply agreements. This followed a law being enacted this month that paved the way for US inflation-linked tariff increases backdated to the middle of 2022.
Aker Horizon’s 58 per cent stake in Mainstream accounts for more than two-thirds of the group’s assets. That follows Aker Horizon’s previously 43 per cent-owned Aker Carbon Capture, which has the technology to capture and store carbon dioxide from industrial operations, selling 80 per cent of itself last month to oilfield services giant SLB, formerly known as Schlumberger.
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Aker Horizon bought into Mainstream in 2021. Legacy Mainstream shareholders, including the estate of the company’s late founder Eddie O’Connor and Irish high-net-worth individuals, continue to own 16.5 per cent of the Dublin-based unit. Japan’s Mitsui owns 25.5 per cent.
Mainstream is building a 97-megawatt solar farm project in South Africa and anticipates reaching financial close for another project, with a private power purchase agreement, the company said. All told, it has a development pipeline for a potential 10GW of power in that country.
A spokesman for Mainstream declined to comment last week after Bloomberg reported that the company was seeking an outside investor in the South African platform. However, he added: “It is standard practice for global renewable developers to continually explore opportunities for investment, divestment and partnership.”
Mainstream, also has priority assets in countries like the Philippines, Sweden, and has recently set its sights on multibillion-euro joint venture projects in Australia.
The company set its sights in 2016 on Vietnam becoming a big market, with plans to develop a flagship 1.4GW offshore wind farm, called Soc Trang. Ms Quaney said on the analysts’ call that delays in the setting up of a regulatory framework to establish a route to market for power from the project has seen Mainstream “dial down spend levels significantly” pending regulatory clarity.
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