TTFNF - Boralex Steps Back from Vents de Dunkerque Project
Boralex (TSX:BLX) has announced it plans to exercise its option to sell its interest in the Vents de Dunkerque consortium that is bidding for a 600 MW project in northern France, the company said on Monday (March 18).
The company, focused on building and operating renewable energy projects in multiple countries including France, said the decision to back down on the project was “after a careful review amid changes in [the] tender’s competitive conditions and risk profile.”
Despite the change in strategy, Boralex said that it will remain as part of the consortium until its interest in the project is sold to the other members. Further, the company said that it will continue to assist in the development of the project during its time as a member of the consortium and after its withdrawal as a member.
“The consortium continues to strongly believe in the prospects and the success of this bid for this very important project for the French Energy Transition,” the company noted.
In January, it was announced that the Vents de Dunkerque consortium would bid for the Dunkirk offshore wind farm project. It was also the first time Vents de Dunkerque revealed the members behind the consortium, which include Eneco, Van Oord and Diamond Generating Europe Limited, a subsidiary of Mitsubishi (TSE:8058,LSE:MBC) along with Boralex.
Further, the consortium stated that it was “strategically positioned” to win the bid due to its various strengths, including its combined portfolio of 2,600 MW in construction and operation in Western Europe.
Last November, the French government launched the tender for the development of the offshore wind farm project off the cost of Dunkirk. The winners are expected to be announced in mid-2019 with many players expressing their interest in the project.
In February 2019, E.ON (FWB:EOAN,OTC Pink:ENAKF) announced its intention to enter the French renewable energy market. According to the release, the company joined the ‘Dunkerque Eoliennes en Mer’ consortium, which includes energy companies like ENGIE (EPA:ENGI,OTC Pink:ENGQF) and EDP Renwables (ELI:EDPR).
Another consortium in the fray is the Moulins de Flandre which consists of the DEME, Quadran Energies Marines and Shell (AMS:RDSA,OTC Pink:RYDAF).
Total (EPA:FP,OTC Pink:TTFNF), along with Orsted (CPH:ORSTED,OTC Pink:DOGEF) and Elicio have also formed a consortium that would submit a joint bid for the Dunkirk offshore wind farm project.
Despite the decision to back out of the Dunkirk project, Boralex has a healthy presence in France. In a separate release on Monday, the company revealed its commissioning of the 20 MW Basse Thiérache Nord wind farm, which will increase its capacity in France to 941 MW and its worldwide capacity to 1,942 MW.
“Basse Thiérache Nord is being commissioned shortly after the Sources de l’Ancre and LePelon wind farms. We’re starting 2019 with the same momentum we achieved in 2018,” Patrick Decostre, vice-president and general manager of Boralex Europe, said in the release. “This success proves the collective capacity of Boralex’s teams to meet their set objectives and commitments.”
The 20 MW Basse Thiérache Nord wind farm consists of six V112 Vestas’ (CPH:VWS,OTC Pink:VWSYF) wind turbines at a rated capacity of 3.3 MW each. The company said that the wind farm is expected to contribute C$5.3 million to Boralex’s annualized EBITDA.
Additionally, Boralex also reacted to the decision made by the Administrative Court of Appeal of Nantes concerning the Moulins du Lohan project which was awarded in the company’s favor. The 51 MW project has been in development for 10 years and was expected to be commissioned in 2018. However, the project hit legal roadblocks with its work interrupted in June 2017.
“This is an important decision that confirms a truly exemplary project for the territory in terms of environment, energy and social benefit,” the company said in the release. “It is also an important decision for our entire sector in terms of legal security for investments. We will work with our various partners in preparing to restart the work.”
Following the announcements, Boralex was down 0.63 percent over the two day trading period with the stock closing the trading session on Tuesday (March 19) at C$19.02. The stock has a “Buy” ranking on TradingView with 17 verticals in favor, eight in neutral and three against.
On TipRanks, Boralex has a “Strong Buy” ranking with an analyst target price of C$23.75 which represents a 24.87 percent upside from its current price.
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Securities Disclosure: I, Bala Yogesh, hold no direct investment interest in any company mentioned in this article.