Good morning, ladies and gentlemen and welcome to the Boralex inc. third quarter 2021 results conference call. Note that, all lines are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. [Operator Instructions]. Also note that the call is being recorded, Friday, November 12, 2021. I now would like to turn the conference over to Stephane Milot. Please go ahead.

Merci beaucoup. Thank you operator. So good morning everyone. Welcome to Boralex third quarter results conference call. So joining me today from our head office here in Montreal, we have Patrick Decostre, our President and Chief Executive Officer and Bruno Guilmette, Vice President and Chief Financial Officer and other members of our management and finance team. Mr. Decostre will begin with comments about the highlights of the quarter. Afterwards Mr. Guilmette will carry on with financials. And then we will be available to answer your questions. As you know, during this call, we will discuss historical as well as forward-looking information. When talking about the future, they are a variety of risk factors that have been listed in our different filings with securities, regulators, which can materially change our estimated results. So these documents are all available for consultation at sedar.com. In our webcast presentation, the disclosed results are presented both under IFRS basis which we now call consolidated and on a combined basis. So unless otherwise stated, all comments made in this presentation will refer to combined basis figures. The press release, the MD&A, the consolidated financial statement and a copy of today's presentations are all posted on the Boralex website at boralex.com under the Investors section. So if you wish to receive a copy of these documents, please contact me. Mr. Decostre will now start with his comments. So please go ahead, Patrick.

Thank you Stephane. Bonjour. Good morning everyone. I am pleased to present you our third quarter results today. One of the highlights of the quarter was the continued growth in operating income and EBITDA in spite of the lower than expected wind conditions. The submission of solar projects totaling 800 megawatts in the Tier 1 New York State RFP and the addition of 103 megawatts to the preliminary phase of our pipeline are also important elements of the quarter. One last highlight of the quarter was the closing of our first sustainable financing through the renewable and extension of our corporate credit facility and letter of credit facility totaling $525 million. In terms of market conditions, in Canada and the U.S., for sure, the proposed U.S. energy infrastructure plan was followed very closely by the industry. This plan was finally approved by Senate and will be an important driver of future growth of the renewable industry in the U.S. In the coming months, we are expecting results from the Tier 1 RFP in New York State and more information on the 300 megawatts wind RFP and 450 renewable energy RFP in Québec. The selection of hydro-Québec export line to New York City in the tier 4 RFP should also be positive for the overall renewable energy development in Québec in the coming years. Moving to France now. Notwithstanding the political debate, RTE, the French transmission system operator, recently issued six different productions mix scenario for 2050 and all of them are highly promising for renewable energy. The most conservative scenario was the highest nuclear capacity projection refers to a solar production seven times higher than today and onshore wind productions 2.5 times higher. The 100% renewable and most ambitious scenario indicates a solar production 21 times higher than today and onshore wind production four times higher. Final point for France. We are planning to submit our bid in the next request for proposal plan in the coming weeks. I will now review the main variance in our portfolio of project. We added four wind projects and two solar projects in France to the preliminary phase representing a total of 103 megawatts, including the optimization of wind project. Project in the pipeline continue to progress with 45 megawatts of project moving to mid-stage and 618 megawatts of project moving to advanced stage. In total, we are now developing portfolio of wind and solar project of 3.1 gigawatts and a 193 megawatts of storage project. Let's review change to the growth path now. Two wind project in France moved to the secured phase adding 34 megawatts to the growth path, including the optimization of the Éparmonts Repowering project. Projects under construction are progressing well with three project totaling 30 megawatts to be commissioned as planned in the four quarters of this year. We have now 664 megawatts in the growth path, 521 in the secured stage and 143 megawatts in the under construction and ready to build phase. In total, when adding the growth path to our existing production capacity, potential capacity is 3.1 gigawatts. In conclusion, as you can see on slide 12, we are pursuing the execution of our strategic plan and are making good progress on all four strategic orientations. This completes my part, I would know let Bruno cover the financial portion in more detail and will be back later for the question period. Bruno?

Thank you Patrick. Good morning everyone. I will start with a review of the progress made in light of our new 2025 corporate objectives. Total capacity increased slightly in the third quarter with the commissioning of our wind farm Extension Plaine d'Escrebieux on August 1, 2021 and now reaches 2.5 gigawatts. Our last 12-months EBITDA continued to increase, thanks to our acquisitions and commissioning, but the AFFO slightly decreased due to the increase in project debt repayment and distributions to non-controlling shareholders. Our reinvestment ratio stands at 53%, in line with our 50% to 70% target. About our CSR strategy. We continued to make good progress on the environment, society and governance aspects. We are finalizing the assessment of our carbon footprint. We have reviewed our calculation methodology for CO2 avoided and are putting together a more formal plan for managing end-of-life assets. We also launched the training on indigenous culture with a participation rate of 97% so far. We set specific diversity targets, as indicated on the slide, notably for the percentage of women in management positions and new hires. Finally, we have increased our participation in different referential like S&P and CDP. And as mentioned by Patrick, we closed our first sustainable financing. Taking a look at our debt objective now. Our corporate debt to total debt ratio remains stable compared to the previous quarter. We are working towards our objective to obtain an investment grade rating and increase the proportion of corporate debt. I will now cover the financial results for the quarter, starting with production. Wind production in Canada was 6% lower than our anticipated production and 5% higher than in the same quarter last year, driven mainly by acquisition. Comparable production was 10% lower than last year as wind conditions were weaker in the second half of the quarter and compared to a strong third quarter in 2020. In France, wind production was 15% lower than anticipated and in line with the same quarter last year as growth coming from commissionings compensated for the decrease in comparable production. Wind conditions were also weaker in the second half of the quarter in France. Overall, total wind production for the quarter combining Canada and France was 10% lower than the anticipated production and 3% higher than last year. Turning to hydro now. It was a very strong quarter for our U.S. assets with production 81% higher than anticipated production and almost three times the production generated in the same quarter last year. This more than compensated for the weakness in Canadian hydro and resulted in total production for the hydro sector at 21% higher than anticipated and 42% higher than in the same quarter last year. Finally, production from our U.S. solar acquisition was 10% below anticipated production caused by mix of less durable sunlight conditions and some maintenance work. In summary, total production for the quarter was 7% lower than anticipated and 22% higher than last year. Third quarter revenues were up 8% compared to last year, mostly due to the increase coming from the hydro and solar segments. For the third quarter of 2021, operating income was up 7%. EBITDA was $93 million compared to $83 million for the same quarter of 2020, a 12% increase. We generated $47 million of net cash flows related to operating activities compared to $73 million in the same quarter last year. Cash flows from operations was $66 million in the third quarter, a $3 million increase over the same quarter last year. AFFO was $21 million compared to $26 million in the third quarter last year due to the slight increase in debt repayment and distributions to non-controlling shareholders. Our financial position remains solid with our net debt to total market capital ratio of 46% on September 30, 2021 compared to 41% on December 31, 2020. In conclusion, again, this quarter, we reported strong growth in operating income and EBITDA in spite of unfavorable wind conditions. We are making constant progress in the execution of all strategic orientations and 2025 corporate objectives. The results of the 800 megawatts solar projects submitted in New York State request for proposals are expected by year-end. We are in an excellent financial position to pursue growth organically and through accretive M&A and we are pursuing the work to optimize the capital structure and improve our financial flexibility. Thank you for your attention. We are now ready to take your questions.

[Operator Instructions]. And your first question will be from Nelson Ng at RBC. Please go ahead.

Great. Thanks and good morning everyone. My first question.

Good morning.

Good morning. My first question is related to cost escalation which has been very topical recently. You obviously have about 200 megawatts of New York solar projects under advance development. And I believe the 200 megawatts need to be completed around 2023. Can you just talk about pricing? How much or what portion of those projects in terms of cost as been locked-in? And just a general color on costs, labor tightness, schedule and things like that?

What I can tell you, Nelson, is specifically on base project. We have an update some weeks ago with the team about all the different variables that change and an update of the global portfolio model. And we are still in area where these project are interesting for Boralex. The FID has not been taken already. But we are finalizing the things and looking to what happens. On one of these project, there was a cliff date by the end of 2022, but we just get the extension. So to your point, we are flexible and today we are still in the right waters.

So just to clarify, so one of them had an end date of 2022 and you have got an extension? And then are the rest at the end of 2023 and there you could potentially get extension on those as well, if needed?

Yes. And the one we get an extension is a 20 megawatts project. And so I am confident that we will find the time to settle the things and to take the ID in the timeline that where its possible to build and to do the project.

Okay. Thanks a lot. My next question just relates to France. Obviously, there is a pretty good pipeline in France and there's plans for a lot more wind and solar. Can you talk about, I think last time you mentioned that you would roughly bid about 100 megawatts per year into RFPs in France. Is that still the case? And then the second part of the question is in terms of funding growth. I believe one potential option you are looking at is to sell a minority stake in the French business. Can you just touch on both questions?

Yes. On the first question, this is indeed the short term, say, target is 100-plus megawatt per year. That's the French target globally. And on the second part, we have started process and it's an alternative to other financing globally. As a corporation, we have to look to the different alternatives. So we will decide on the partner on the basis of essentially three things. The first is the value. The second is the governance. And the fit, the last one is the fit with the team to be sure that we will continue to be nimble and aligned on the long term and create value for Boralex on the long term.

Great. Thanks for the color. I will get back in the queue.

Thank you. Your next question will be from David Quezada at Raymond James. Please go ahead.

Thanks. Morning, everyone. A question just, I believe at your Investor Day, you talked about potentially expanding and diversifying within Europe through M&A. I am just curious, you know in today's higher power price environment in Europe, how is your view of M&A in the region that you mentioned elsewhere in Europe, how has that evolved since then?

Thank you, David, for the question. We are analyzing different opportunities whether it be in Europe or North America. We also want to continue to be disciplined. As you mentioned, it's a competitive environment out there and we will select according to our investment criteria. So plan has not changed. M&A is a compliment to our internally generated growth or organic growth. So we will continue to be disciplined on that front. But we are looking at different opportunities in France, specifically in Europe and France and potentially some other countries.

Okay. Great. Thank you for that. Maybe just one other one for me. Just with some of the PPA expires you have over 2023, 2024 and again I guess referring to the higher power price environment we are seeing today, is there any potential to renegotiate those earlier?

No. We should wait for the expiration of the existing PPA. What is interesting is due to the present high price in Europe, there is a lot of interest from corporations to buy green electricity on the long term to protect them on the price. So that's stronger than two years ago. And I think it will last for a certain period because now people understand that when you are exposed to gas and CO2 price, which is the marginal electricity cost drivers, you are not protected. So that's very interesting. And we have even now some demand for greenfield project PPA to sign for with new assets, with additionality and we are discussing this kind of things too, which create another alternative for us in the future.

Excellent. Thank you for that. I will turn it over.

Thank you. Next question will be from Rupert Merer at National Bank. Please go ahead,

Hi. Good morning everyone. Following up on the French market. So looking at your pipeline, it looks like you have about 133 megawatts advanced stage and 687 mid-stage. And I understand you are targeting about 100 megawatts per year. But if you see an acceleration of the market, either through RFPs or through, say, potential greenfield development directly for corporate optics, how quickly can you accelerate those mid-stage assets and get them into construction?

Yes. Good morning, Rupert, sorry, Essentially in France, as you know, what is limited is the number of authorization to build and to operate. So as you also know, we are I think quite successful in this in obtaining authorization because we do the right process for consultation when we apply. So yes, there is interest from the market in terms of economics. And I don't know exactly how the global authorization process could be changed in the future because maybe the government and they have already done something, there was some declaration some weeks ago with the Barbara Pompili, the minister, to explain how she wants us as an industry to develop projects and Nicolas was there because Nicolas, as you know, is a chair of the Wind Energy Association in France. So we are really involved in this. I cannot promise that it will accelerate. I can tell you that we are working hard on that to have a constant flux of project in France. And what is good is with the RTE scenario, we have no longer term view after 2030 with very important project and construction. So that's my view.

Okay. Thank you for the excellent color. And then following up on Nelson's question earlier about inflation. You gave us some good color on the first 200 megawatts of solar you have in New York and thoughts on the impact of inflation on those projects. What about the 800 megawatts that you bid into New York recently? Can talk about your strategy in bidding those 800 megawatts and what contingencies you may have for the rising costs on those projects? And actually what does the rest of the pipeline like, your 500 megawatt, let's say, of ready to build projects?

Yes. The risk today is not inflation. It's the volatility of the price and not to be squeezed between the defined price and the costs of construction, which change. So in this situation, first of all we have to take quickly a decision. When the decision, when the planet align, we don't have two months to take a decision today. We have generally two weeks and that's how we can do with existing project. And that was part of my answer to Nelson, we need to be sure that the planet are aligned for the 200 megawatts and then we will take the decision and go full steam ahead at that time. For the other project, the 800 megawatts, obviously we have taken into account the last information about the costs and some risk about this inflation risk and I think it's in the price that we bid. So generally speaking, we will not be taken by surprise because it's already in the price that we bid.

All right. Thank you. I will leave it there.

Okay. And just on the project, as I already mentioned and which is also our strategy in France, when we bid different project in the bid, we have a letter of the return and of the price. And so we don't want to be competitive on 100%. Or if we are competitive on 100%, we should be very happy to be competitive. So the last project has a return, which is higher than the previous one and this is also creating a portfolio of projects in term of return and in time.

Thank you Patrick.

Thank you. And next question will be from Sean Steuart at TD securities. Please go ahead.

Thank you. Good morning. Patrick, you touched on Québec and the opportunities for strategic procurement in RFPs there. And I wonder if you can comment on what your perspective pipeline beyond the Apuiat development looks like in the province and the scale that you might be able to bid in the future RFPs in Québec as we go ahead?

Yes. The first point. I did mentioned in the speeches the fact that 10 days ago or 11 days ago, the government, HQ has filed the update of their electricity supply for the next for 2029 and this has increased from what they provide two years ago by 6.5 terawatt-hour. So this is due to the greening of the Québec industry. This is due to the will of the government and the action from the government to bring new economic sector here like biofuel, hydrogen, battery factories, data center, blockchain and all those things which create demand and the fact that Québec wants also to switch vehicle to electric vehicles. So just that's the general situation. And on our side, we have nurture all our project, even after 2018 and continue to work on their development and it's a public information that on Seigneurie de Beaupré, we are developing 800 megawatts project. This is under the process of consultation locally. And so we have this project and we have extension of the project. So we have an interesting pipeline for the future in Québec our side.

Thanks for that detail. Second question. You have touched on France specifically and New York. Wondering if you can comment on the broader prospective pipeline in the U.S., I suppose California is the focus and outside of France and Europe any particular projects or areas that are more advanced relative to the rest and how should we think about the prospective pipelines there?

Yes. In California, we have applied for 100 megawatts storage. We have another part of storage in the pipeline, which is in New York State. This is greenfield development in those two states. In California, what I see for today and what we see is not energy production greenfield development, it's an optimization of the project in place with storage. And we are working on other states in the U.S. that I will not say disclosed today, which are similar to the state of New York two, three years ago, meaning thinking about changing their law and with important population and a need for green electricity. So essentially to start, greenfield development there also. That's what we are doing. As Bruno mentioned, we are also evaluating different M&A opportunities and stay disciplined on that. And if we find something which is interesting and good and accretive, like in the past, we will go ahead. If not, we will continue to hunt.

Understood. Okay. Thank you very much. That's all the questions I have.

Thank you. Your next question comes from Mark Jarvi at CIBC. Please go ahead.

Just a question on the RFP submissions in New York. Are you able to kind of give us sort of a timeline for earliest potential commissioning and then sort of the timelines for the longest dates of commissioning? Are these project that are some are going to be working 2024, 2027 or any other sort of bookends on the timing on those projects?

Mark, good morning. Essentially, I think we have, first of all, to wait about the decision, which will be at the end of this year or beginning of next year. And yes, it will be probably 2026 or 2027. But I don't know. We should have an idea of the volume first and we should, at that time, we will be able to be more specific about the year when we think this will be connected.

But it couldn't be any sooner than that? Like are projects that could slide into 2024 or 2025, you don't think?

No. That's the project we discussed earlier, the 200 megawatts. Essentially, the date without changing, coming back to Nelson's question, without changing anything the date are for one project is 2023, thanks to the extension and the two, the other project are 2024 without any extension. And I think the fact that we get an extension of the small project, it shows that NYSERDA is waiting to have the production one day or another and not squeeze us between. And so we all think that inflation is temporary so we can manage that and the contract party is understanding this. So I think it's good.

Makes sense. And then going back to the corporate PPA market in France. Today you are contracted on the shore. You brought up the comment about maybe being able to go some interesting greenfield projects? Are you seeing an uptick, you think, within the next couple of years you could maybe do like 15-year corporate PPA and bypass the RFP process?

Yes. It depend of three things. The first is, if a project is meet the criteria of an RFP with EDF, the first priority is to bid the project in the RFP. But if the competition is too important and if taking into account that we don't have the same counterparty risk. Generally speaking, there is no, if you go for any corporation, the controversy risk is generally higher than EDF guaranteed by the French state and then we need to have a higher return and on a higher price for electricity. So that's where we are. But yes, it could be an important alternative for us on the long term. And I think it's important to have one foot in each to be able to have alternative because if the market is closed for any reason like we have seen in different market and for any reason in some years, the French state decide to temporarily stop RFP, then we have the alternative. And I think in term of risk management, this is the right way to go.

Makes sense. And then, Bruno, for you. What are the remaining steps to get the investment grade credit rating and timing on that? And then second, if you do go to the path of longer term corporate PPAs, how does that fold in or how do your lenders, when you guys have that sort of portfolio financing approach in France to those contracts?

Well, first of all, good morning, Mark. Essentially, on the credit-rating, we are working hard on that front. As you know, it's a 2025 target. We certainly are hopeful to achieve it as soon as we can. But we will certainly disclose the progress at the right time on that. But we are certainly getting organized to do that as soon as we can. On the corporate PPAs, we believe there is a financing market for the corporate in France. There is a financing market that is willing to consider those types of new customers, new offtakers. And I mean, we are having those kinds of discussions. As you know, we have signed corporate PPAs in the past. These were not for greenfield assets. But we certainly believe there and are entertaining discussions on financing those types of contracts which would be fairly innovative in the market, but there are some existing, a small number, but there are some existing precedents.

So just to clarify, Bruno, under your existing agreements you have, could these project fit in to that? Or would it have to be outside that sort of larger financing vehicle you set up in France?

We would likely go with separate new financings for those corporate PPAs.

Got it. okay. Thanks for the time, Bruno.

Does that answer your question?

Yes. Exactly. Perfect.

Thank you. Next question will be from Naji Baydoun at IA Capital Markets. Please go ahead.

Hi. Good morning. I just wanted to start with New York. Maybe if you give us some color on the expectations for your bidding strategy there? I guess I am just trying to understand the trade-off between bidding the entire 800 megawatts all at once or in different stages or tranches, rather from the process?

Good morning Naji. Essentially, as I mentioned, there is project which are really optimized. There is project which are in the optimization. And then there is project which are little bit more earlier in this. And so it's good to bid when you meet the criteria of bidding. I think it's a good discipline to do it. And if some project are not advanced and accepted or order meets the clearing price, then you continue to optimize them and you bid them the year after. So I think essentially it's that. And so with the project which are less optimized today, we have an expected return, which is a higher and cover the difference and we have more contingency everywhere. So we know that we would be happy if we were selected. And the consequence of that is that what I call the levelized the REC cost, which is the cost of the REC on top of the expected curve over for electricity price that NYSERDA is taking is different and we know that the clearing levelized REC costs will be somewhere in between our project.

Okay. Understood. So it's sort of a diversification and string around the risk between the projects. Just on M&A as well, you talked in the past about structuring your activities differently and maybe taking a different approach to acquisitions. Can you maybe just talk about what initiatives you are undertaking to achieve this goal? And maybe how that's affected the way you analyze or look at deals or approach your M&A strategy?

Morning Naji. On the M&A front, we hope that we are always improving and getting more sophisticated. Really, it's about our portfolio strategy. So we know we have a fairly good deal on our organic development on our pipeline and we want to complement that with M&A, that as I said previously. So we look at different financial criterias but we also look at the strategic factors as mentioned that could bring either into a new territory, having the appropriate team that compliments our existing workforce and so on and so forth. So there is few elements, there is a few criteria that we consider and we believe that on some acquisitions we will be quite competitive also because of our strengths where we can optimize some assets, such as we are doing in California and we can add on to the strategy that the previous owner had. So in terms of being more sophisticated, we also look who is the owner, what type of partnerships we could have on that asset and so on and so forth.

Okay. Got it. That's very helpful Bruno. Thank you.

Thank you. And your next question will be from Andrew Kuske at Credit Suisse. Please go ahead.

Thank you. Good morning. I guess as a broad question, when you think about your pipeline of opportunities what you continue to grow, do you feel you are at the stage where really what you are delivering at the end of the day or really the high-graded opportunities and you have a number of other things that you could do, they would provide sufficient returns, but you are balance sheet constrained or there is other constrains that effectively hold you back from doing those? So I guess maybe just you can frame that, to start?

I guess it's is one way to look at it, Andrew. In terms of constraints, for sure, balance sheet is one. Although we believe that we have different sources of financing. Our balance sheet is strong. We have different sources of financings. We have mentioned partnerships as one. On the debt front, we are working hard towards diversifying our toolbox on different types of financings. And then from an equity perspective, we try to be disciplined on issuing new equity. But certainly we do need to prioritize. We have opportunities on, I mean, at least three or four different countries. But so far, I can't say it's been a very serious constraint other than M&A. And as I said, the key elements that we need to prioritize are the add-ons on the M&A front.

Okay. That's helpful. And then maybe just thinking about at operational level, whether you are thinking about just existing expansions of assets or opportunities or M&A, could you maybe just give us a bit of a refresh on how you approach your maintenance activities around a bunch of the units you have? Whether it's relying on OEMs? Internalization, where you are dong it yourself? How do you sort of think about that process and the opportunity set that that could present in certain M&A?

Yes. We are agnostic about relying on OEM or internalize. We are not agnostic on risk reward of the orchestration. So typically in Québec and essentially in Québec, not yet other because for maintenance contract is constrained in Ontario and BC. But in Québec. We are presently internalizing with a lot of success the maintenance. And when I say a lot of successes, we are choosing the right people to come with us. They are highly motivated. I make the round-trip around all our site in Québec during the last months and I can tell you that our people on the on the field are really motivated to do it better and to optimize. And we are successful also the costs part and the production part because it's not just because we are reducing the cost of the maintenance, it's also because we are increasing the production and the energy availability of the turbine. In France, we have just made opposite move in June by signing with Vestas, a very interesting contract, long term contract for maintenance where they are taking more risk. And when we make the evaluation of where we are and what they proposed to us, it was really interesting to go the other side and externalize the maintenance again with Vestas. I think the move we did in the past starting in 2007, but many times in France to internalize was also something which pushed the turbine suppliers to organize themselves to propose something different to their customers. So just to say that when we externalize the costs are interesting and the risk are also interesting. So having said that, on an acquisition, it really depend of our analysis during the due diligence on CRE. We didn't put money on the internalization of the maintenance of the solar assets. But it was a potential upside and we are still working on this because the existing contract is interesting. And if we want to make a better in a new country, finally it's a question we have to look to. But I see some optimization, again on CRE on energy availability. How to do the maintenance not just to reduce the cost and maintain the cost but to have the right availability. So it's a complex things but were analyzing every point of it.

That's very helpful color. And so I guess just in context, your ability to be either internalized or external, you get this duality that you have experience on the internal slide and that probably gets you better price tension from the external slide. So you have the best of both worlds, which then drives the return more than anything else.

I think we are not an easy client for maintenance people but we are good partner to them because as you mentioned, our people have a lot of skills and idea and then it makes things more interesting. And I think that's good for us and I think that's good for the OEM. For the moment within Canada, it's clear that we are doing better doing it ourselves. So it's a strength.

And that should be good for shareholders too. I appreciate the time. Thank you.

Thank you. Next question will be from Ben Pham at BMO. Please go ahead.

Hi. Thanks. Good morning. Following on some of your comments around no-core asset sales and moving through the process and I am wondering what is the primary financial metric you guys are going to look at in assessing success exit? Even if it does, is it free cash flow per share accretion, is it NPV? Like what are you looking at when you do the relative analysis?

We are very much focused on free discretionary cash flows per share. It's and important criteria for us. But also the long term value creation for shareholders. So it's cash flows, but certainly we do monitor long term IRRs on each and every one of our opportunities.

Okay. And then can I then add that because I know, Bruno, like in the past, you mentioned maybe not to focus on the EBITDA build a bit of build multiple as much for secured projects look at levered IRR. So is this really a situation you can maybe you can sell an asset at nine times EBITDA and just draw a number when you are building at 11 times but you would do that as long as it is free cash slow accretive on a levered basis?

Sorry. I don't think I got your question completely, Ben.

Yes. So my question really is, let's say you are building asset that 10 times EBITDA or so, like $5.5 billion or so. And when you look at asset monetization, are you willing to sell an asset below that number on an unlevered basis by selling at eight to nine times. I am not saying that's the number. And you want to do that, like the headline doesn't look great but we do on a levered basis, just how you are structured at the debt, it's still accretive to your free cash flow. Like would you be willing to do that?

I mean, essentially you are asking if we are willing to look at selling, well, first of all of our partnerships are based on an accretive value. Multiples, the issue with multiples is you are not taking into account, for example duration of contracts. So I mean the way we look at selling our assets is long term value creation to our shareholders, not on a multiple basis, because multiples don't tell the whole story. I guess that's probably what I said in the past. So it's really aimed at, are we going to add value to our shareholders long term and I mean when I look at all of our assets so far, the today is certainly higher than what we built it for. So that issue hasn't arisen yet.

Okay. That's great. And then maybe on the French elections and the news headlines. Are you considering maybe you need to, when you bid into the next couple of rounds, is there a political risk premium you need to consider in your bidding behavior?

Which market are you talking about?

This is in France.

Okay. I am sorry. I don't think we are taking any political risk. The point is, if you look to the French election situation, Macron has to play with 50% on renewable and 50% on nuclear. The nuclear has more challenge than renewable to restart the industry. And I am not speaking only about social acceptability cost and delay I am speaking about also interesting people, talents to go back to the nuclear industry and to start studies and all those things. So there is a lot of challenge on this side and he has to play with that because there is a lot of people working in this business in France. And yes, you have the extreme rights which are always speaking more loudly than the others and they are in speaking up against wind industry but they will not make it at the end because they will not win the election. I am confident about this. And so I think it's my fifth or sixth presidential election in France since I start with Boralex. So we are used to that. And that's also something which is important. When I mentioned that Nicola was with Barbara Pompili when she announced that 10 measure for easing development and have an acceptable wind development. We are quite close in term of the message we can bring to the majority and the PM and the PR about wind development. So Boralex is really, I think, one of the -- obviously, there is EDF and Engie which are partly or totally state-owned company. But we are the challengers since years now and we are well-positioned to understand what is behind. I am not sure that all international investors our understanding that in France wholly. Because when you read the newspapers, it's not what you see.

That's very helpful color. Thank you.

[Operator Instructions]. And your next question will be from Matt Taylor at Tudor, Pickering. Please go ahead.

Hi. Good morning guys. Thanks for squeezing me in here, just before the top of the hour. I just wanted to follow on to Ben's question on divestitures there. I wanted to hear your thoughts on your hydro portfolio? Your sites seem to be performing quite well. I get that there's ebbs and flows there. But with no growth in the pipeline, what strategic value do those assets provide for Boralex? And could they be viewed as non-core and try and looking to fund your 2025 growth plan?

Yes. Essentially, I think, just to go back, Matt, to your question and to Ben's question. I think you know, divesting is really something and not just to divesting, portfolio management is something we have to which is more complex than a multiple or just a financial decision. Indeed, we have to take into account, if you look to, should we have sold our U.S. assets the last quarter, it would have been totally different. So I think that when I am speaking hydro U.S. assets. So I think the diversification is important in term of revenue pattern. Today, our hydro assets are really optimized and I think it's not like the co-gen in France or the biomass which is completely different business than hydro, wind and solar. Hydro is the managed from distantly. And so if we have an opportunity, it could be, again, I am agnostic about this, but we have to take into account different factors in the decision on the short term and on the long term. And I think that's how we do it.

Thanks Patrick. Is there some strategic value there too, as you mentioned the Québec government is more supportive and looking at not just renewable power but different technologies. Do those assets in Québec give you an opportunity to maybe involve in customers that want hydrogen or various other pieces that we should be thinking about and markets should be thinking about in terms of, you have mentioned some RFPs that are coming up in Québec. Is there some strategic value of these hydro assets?

Not specifically, I think. I think of what comes from our assets in Québec and our presence here, it's again the knowledge of the way to the government is planning the next 10 years. Like I mentioned for France, obviously we understand it quite correctly, I think in Québec. And we have a good view of what is the plan, what everybody says to the media and what will be somewhere the most realistic scenario. And we are working around this on our greenfield development. The hydro asset sometimes is very good. For example, when we start in the U.S. in New York State, we start really, if you look geographically, we start really the first project around the area where we have hydro assets. And it was important in term of reputation. And then we have no turn for larger project in other part of the state of New York. But the first step was really built on our reputation as the good hydro player there and the good reputation. So we have to take that into account too.

Okay. That's great. And last one I have, can you frame whether or not this expert line to New York City gets built here? How that changes your view on what your cadence might look like you sanctioning or at least securing more renewable projects in Québec over time?

For sure, since four or five years, even before, for sure the goal of Hydro-Québec was to use as what they call their available energy to export to different market, the Atlantic, Massachusetts and New York City. You know to have signed the last. They have agreed to last or be selected for the last block of this strategy. So I think it's very good because this will create new need in Québec. And when you look to the balance between production and demand in Québec, they need new electricity, new power, new energy and new power, which is good. And they don't have any energy available, for example, if when they are another province or state need more electricity. If, for example, Ontario needs some electricity for their period when they will stop Pickering and there is no more electricity available in Québec. There was one year ago or even some months ago. But now it's dedicated to New York. So it means we need to build something either in Ontario or in Québec, in my example. So I think that's good for the whole industry.

Okay. That's helpful. Thanks for those comments, Patrick.

My pleasure, Matt.

Thank you Matt.

Thank you. And at this time, gentlemen, we have no further questions. Please proceed.

Well, thanks a lot operator and thanks to everyone for your attention. A lot of the good question on this call. We are past the hour already. So if you have any additional questions, please call me at 514-213-1045. I will make sure we quickly answer your questions. Our next call to announce fourth quarter and year-end results will be on Wednesday, February 23, 2022. So already there. So I hope you all remain healthy. Have a great day and quality time with your family during the upcoming Christmas vacation. Yes, we are almost there, ready for karaoke. Thank you. Bye.

Merci. Thank you. Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending. And at this time, we ask that you please disconnect your lines.