It’s in our DNA to continually seize new opportunities. For more than 15 years, Scatec has been exploring ways to develop and scale renewable energy to improve lives.
Our strategy towards 2027 is what grounds us and gives us direction. It sharpens our focus on areas in which we can create the greatest value. We aim to be a leader in developing, building, owning, and operating renewable energy and green hydrogen in a value accretive and sustainable way in our key emerging markets. The moves we have made over time have positioned us to drive results and capture the right opportunities for growth.
Currently, we have solar, wind, and hydro power plants with a capacity of 4.6 GW in operation and under construction across four continents. This will generate predictable, diversified cash flows under long-term contracts. We have 1 GW of capacity in backlog and a project pipeline of close to 16 GW.
We aim to continue our high rate of growth in focus markets. When investing, we target projects that generate long-term profitable returns of 1.2 times the cost of project equity. We apply our proven integrated business model to generate additional margins, to maximise value creation. We remain opportunistic in our approach outside our focus markets, applying strict guidelines for the size, attractiveness, and scope of these projects.
As part of our strategy, we will prioritise selected emerging markets. These markets are characterised by rising demand for renewable energy, a clear green agenda from the government, high potential for local development, and where there is potential to apply and scale our integrated business model. In our prioritised markets, we will focus on larger projects, as we believe that through a more targeted approach, and through an injection of capital and resources into these specific markets, Scatec can create more value through scale benefits and better success rates.
Our sharpened strategy also sets high ambitions for green hydrogen. We aim to secure long-term offtake agreements and bring in partners who offer competence, finance, and risk management support with these large infrastructure projects. We believe our capabilities in project development and our emerging market positions provide a strong basis for success, and we have already made good progress on several projects.
We are setting up our company to be consistently at its best. Scatec is a long-term industrial owner of assets, and we will continue to manage our existing asset base and deliver solid results through cost and asset base optimisation and remain ahead of the curve on sustainability compliance and international best practice. Looking ahead, we plan to actively manage our portfolio through consolidation and asset rotation to extract maximum value out of our projects.
Release, Scatec’s flexible leasing solution for pre-assembled and containerised solar PV and batteries, will concentrate on the African market in the near-term, prioritising projects that help establish a strong track record and generate increased demand, within the 1-30 MWp size. We will also explore an investment model for Release, and we are considering launching Release as an independent vehicle.
We consider ourselves a team of changemakers who drive results and capture opportunities. To ready ourselves for the future, we are focused on responsibility and predictability for our stakeholders, maintaining high standards for our projects and their associated environmental and social impacts, and strong community engagement. We have been a member of the UN Global Compact since 2018, which reinforces our commitment to responsible business. In addition, we remain committed to operating in line with the Equator Principles and IFC’s Environmental and Social Performance Standards to ensure consistent practices across all projects. Our work is also guided by the OECD Guidelines for Multinational Enterprises.
We believe that partnerships are essential to our success, and, as part of our strategy, we are setting clear expectations and plans for joint initiatives. We work alongside policymakers, financial institutions, suppliers, and others to create value, stimulate growth, and mitigate risk in all endeavours. Our key stakeholders provide valuable feedback and input to our material ESG topics and sustainability work.
Developing our people and fostering a culture that nurtures diversity is key to our future. We are building competence and the right leadership skills to guide the company forward. Our team has significant experience in unleashing new opportunities and managing risks in complex environments, which we consider our competitive advantage. We will continue to build on these core competencies, while seeking new investment opportunities and ensuring that long-lasting renewable assets can be financed and built. We embrace holistic diversity, equity, inclusion and belonging (DEIB) in our practices, policies and procedures and development programmes and initiatives.
