For those who have not heard of Magnora before, can you tell us a bit more about your business, what you do, and which markets you address?

Magnora is a renewable project developer with operations across multiple countries, including Finland, Sweden, Norway, England, Scotland, and South Africa. Our core business revolves around developing projects that can mature within a reasonable timeframe, typically two to four years, although we do have some projects that may take a bit longer. Our edge lies in our ability to be a reliable partner to landowners, local authorities, and grid companies. We work diligently to secure all the necessary concessions and environmental permits, which allows us to move forward with projects that can either be battery projects, solar PV projects, or wind projects.

We have a couple of offshore wind projects, which is more of a side business for us today but marks our beginnings in this sector. For instance, we recently won a license in Scotland. Generally, our projects are sold prior to construction because large-scale projects require a significant balance sheet and strong organic cash flow. We focus on being less capital intensive, similar to companies like OX2 but with a higher return on capital.

Our operations span multiple countries, and we’re exploring additional markets as well. Our team is quite robust, featuring executives with extensive experience in the energy sector. For example, our executive chairman was the founder of Lundin Petroleum in Norway, which was sold last year. Our team includes people from DNV, former Statkraft professionals, and other industry veterans, providing a deep understanding of the entire value chain from land identification to permitting and community engagement. We maintain a lean operation with over 200 projects in our portfolio, supported by a strong balance sheet and a strategy of diversifying our investments. We have transitioned from an oil service technology company to a renewable energy developer, returning significant value to our shareholders through share buybacks and strategic investments.

Can you tell us more about Helios, the advantages the company has, and how Helios’ services compare to competing players?

Helios is one of our key subsidiaries, and it stands out due to its exceptional team and integrated service offerings. The team at Helios includes individuals with diverse expertise ranging from municipal engagements to procurement, construction management, and technical management. This comprehensive skill set enables us to offer a complete package of services that are crucial for the successful development and management of renewable energy projects.

Helios has successfully sold projects to major players like OX2 and Solgrid in Norway, indicating the high regard in which it is held within the industry. The team’s extensive experience includes working with municipalities, accountants, and permitting authorities, which is essential for navigating local regulations and securing necessary approvals. Additionally, Helios offers long-term technical management services, overseeing the projects for their entire lifespan of 5 to 10 years, which is a significant advantage over competitors who may not provide such comprehensive support.  

One of the key strengths of Helios is its ability to maintain repeat customers, which speaks volumes about the quality and reliability of its services. The integrated approach we offer means that even companies without a local presence can depend on us to handle all local obstacles effectively. This has allowed us to build a strong brand name and solid references in the market. In essence, Helios provides an all-inclusive solution, ensuring that our clients can rely on us from the inception of a project through to its long-term management.

In which segment do you see the most demand: wind, solar, or BESS?

The segment where we see the most demand currently is solar. Solar energy has shown the highest growth, and with the increase in solar and wind installations, the demand for Battery Energy Storage Systems (BESS) is also rising. This is because the more renewable energy sources we have, the more we need BESS to manage grid stability and address the intermittency issues inherent in solar and wind power.

While wind energy is incredibly efficient in many markets, it often faces local resistance due to factors like noise and visual impact. Solar and battery storage projects, on the other hand, are more straightforward and face fewer obstacles, making them more attractive and easier to implement. This has led us to focus more on solar and battery projects, which we find to be more profitable and less politically contentious than wind projects.

However, it’s important to note that the profitability and feasibility of these projects can vary greatly depending on the specific market and local conditions. For example, while onshore wind projects have faced challenges due to rising steel prices and local opposition, offshore wind and solar projects continue to offer healthy margins and strong returns.

Can you tell us about the Red Sands project in South Africa, how you acquired it, and how it has progressed?

The Red Sands project in South Africa is one of our standout initiatives. We acquired the land for this project a couple of years ago, initially with the intention of developing wind and solar energy projects. The site is ideally located close to a robust grid connection, which made it a prime candidate for development. Last spring, the South African Department of Mineral Resources and Energy announced their need for a battery storage project at this connection point. We quickly adapted our plans, utilizing a portion of our land adjacent to the grid connection for this purpose.

We offered this opportunity to several companies and ultimately partnered with Globeleq, one of the leading independent power producers (IPP’s) in Africa,  and have the capability to execute large-scale projects. They were announced as preferred bidder in the auction in February this year, securing the project a guaranteed revenue for 15 years. To date, we’ve received two milestone payments, with the remainder expected upon financial close later this year.

The Red Sands project exemplifies the kind of long-term, strategic investment we specialize in. We entered the South African market about two and a half years before this opportunity arose, anticipating significant deregulation similar to what occurred in the Nordics in the late eighties and early nineties. Our patience and strategic positioning have paid off, as South Africa’s energy sector is now rapidly transforming, offering substantial growth potential for developers like us. This project, along with others in our portfolio, showcases our ability to navigate complex markets and secure high-impact opportunities.

In 3 years, where do you see Magnora?

In three years, I envision Magnora being significantly larger and more influential than we are today. Our growth trajectory has been very strong, with quarterly growth rates of around 20%, and I expect this to continue as we scale up our operations. Our goal is to reach a size comparable to half of OX2 within this timeframe, which is ambitious but achievable given our current momentum.

We are seeing strong growth across multiple markets, particularly in Sweden, Finland, Norway, and South Africa. The expansion of our projects in these regions, coupled with the increasing demand for renewable energy solutions, positions us well for continued success. Additionally, we are exploring new markets and technologies, such as offshore wind and carbon capture, which have significant long-term potential.

Our strategy of focusing on large-scale projects and leveraging our team’s expertise will allow us to grow faster than many of our historical peers. We are also benefiting from the current global emphasis on clean energy and sustainability, which is driving investment and policy support for renewable energy projects. Overall, I see Magnora becoming a key player in the global renewable energy market, with a diversified portfolio and a strong presence in several high-growth regions.

Could you mention three reasons as to why Magnora is a good investment today?

Firstly, the market we operate in is experiencing strong growth with attractive margins. The renewable energy sector is booming, driven by global initiatives to combat climate change and transition to clean energy. This growth is expected to continue for the foreseeable future, providing a robust backdrop for our business.

Secondly, we have an exceptional team. Our team is composed of highly skilled and experienced professionals who are experts in their respective fields. This includes people with deep knowledge of the entire energy value chain, from land acquisition and permitting to project development and technical management. Our team’s expertise and dedication are key drivers of our success and our ability to execute complex projects efficiently.

Thirdly, the timing is perfect. Right now, there is a significant push towards renewable energy, driven by both regulatory requirements and technological advancements. The demand for clean energy is rising rapidly, and Magnora is well-positioned to capitalize on this trend. Additionally, our business model focuses on cash efficiency and high returns on investment, which is becoming increasingly important to investors. We have a proven track record of generating significant returns, and our projects are now starting to pay off with substantial milestone payments.

In summary, Magnora is operating in a high-growth market, we have a top-notch team, and the timing is ideal for investing in renewable energy. These factors combined make Magnora a very attractive investment opportunity today.

NOTE: On 29 May, after this interview, Vinci Concessions, a global infrastructure company and one of Europe’s largest, signed an agreement to buy all shares in Helios Nordic Energy AB.