86 YINSON HOLDINGS BERHAD | INTEGRATED ANNUAL REPORT 2023 RISKS AND OPPORTUNITIES Short to medium-term (1 to 5 years) Long-term (6 to 10 years) Increasing competition may make it harder for renewable energy companies to secure projects. Renewable energy targets driving strong growth provide a wider range of opportunities for renewable energy companies. Continuing to build presence in core markets to build pipeline growth. Renewable energy companies may face intermittency challenges and/ or price cannibalisation related to high penetration of renewable energy generation sources in a single market. Opportunities for hybrid projects, for example a combination of technologies to reduce intermittency effects. On pricing, there are opportunities to examine alternative offtake/PPA structures to minimise impacts. All projects considered with hybrid technical solution where it makes commercial sense. Higher equipment costs due to commodity and inflation pressures could make the economics of projects more challenging. Renewable energy is underpinned by strong government policies, providing surety and incentives for the renewable energy supply chain. Ensuring robust procurement and PPA processes to secure the most competent and competitive agreements. Increasing competition may make it harder for renewable energy companies to secure projects. Renewable energy targets driving strong growth provide a wider range of opportunities for renewable energy companies. Continuing to build pipeline and presence in core markets and progressing assets through the value chain. Risks Opportunities YR’s response OUTLOOK Since its inception, YR has facilitated the Group’s participation in the energy transition and contributed to overall sustainability performance. YR is tracking well against both our short and long-term targets in terms of our pipeline and geographical growth, as well as becoming a standalone business stream that delivers stable long-term cash flows, growth and value to shareholders. We continue to be active across the full renewables value chain as an IPP, as we believe that entering the value chain early allows us to deliver greater returns through leveraging our experience and expertise to de-risk early-stage projects. Furthermore, the secondary market for investment in renewables assets is growing rapidly, which presents everincreasing opportunities to create greater value through capital recycling. YR is now firmly positioned in the onshore renewables market, focusing on the three core geographical regions of Latin America, the Asia Pacific and Europe. The remarkable progress of our pipeline in 2022 affirms the viability of projects in our selected markets and our ability to secure them competitively. We will continue to build our presence in these core regions, balancing risk across a wider portfolio of projects and establishing alliances with local partners who have good on-the-ground experience and knowledge of local conditions. CLOSING REMARKS We have been successful in laying the foundations for a strong growth business based on a pipeline of good development projects. We are now focused on progressing our portfolio of projects so that they become profitable cash-generating assets. Appropriate and timely capital recycling will further increase value to the Group. The Group-wide exercise to provide greater autonomy and more streamlined decision-making to the business units has directly led to the strengthening of YR’s corporate functions and senior leadership team. With the ability to make stronger decisions in a more agile way, we are poised to make significant progress in the coming year. YINSON RENEWABLES
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