BW Offshore Limited (BWO) Earnings Call Transcript & Summary

Ladies and gentlemen, welcome to the BW Ideol company presentation. [Operator Instructions] Today, I'm pleased to present Paul de la Gueriviere, Marco Beenen and Nicolas de Kerangal. Please go ahead with your meeting.

Good afternoon all. I'm Paul de la Gueriviere, the CEO of BW Ideol. I was previously the Founder and CEO of Ideol for the last 10 years. Prior to that, I have experience in developing and financing renewable energy projects, mainly in developing and emerging countries, including 3 years in China, where I've been post in Beijing just before creating Ideol.

And my name is Marco Beenen, CEO of BW Offshore. I've been the CEO since mid-2019, and I joined the company in 2012. During most of my 25 years career, I have been in oil and gas and in particular, floating production systems. And BW Offshore took the decision early last year to invest and build a new renewable energy segment in addition to our FPSO segment, which is our core business. And we consider floating wind as the most scalable renewable energy source, and also the area where we could very well apply our existing global competence and setup. Our strategy was to develop this in partnership, and we identified Ideol as the leader in this floating wind segment. And since then, we have developed a joint strategy for growth and teamed up with Ideol into a new company, BW Ideol.

Slide 4. So BW Ideol is a combination of 2 strong companies that are joining forces to accelerate growth in this booming market. On one side, Ideol is providing a proven floating wind technology with a strong competitive edge. We are bringing a pipeline of existing projects, be it in partnership with leading local utilities, and we are an early mover in this most attractive market. On the other side, BW Offshore is proving an extensive track record in managing and executing large infrastructure offshore projects, creating together a leading floating wind long-term assets owner. Slide 5. We want to leverage both the technology and the competencies of the 2 companies through a dual-leg strategy. On one side, being project codeveloper and co-owner, so investing in project companies. In the second leg being provider of floater to customers, the utilities, under floater EPCI contract, including floater, noncore maintenance services with the ultimate core to transform this business line into a floating wind turbine leasing model leveraging on BW Offshore extensive track record on [indiscernible]. Slide 6. With the advantage of being an early mover, we are among the very few players in the market having real assets in the water. We are one of the pioneer of this new industry with over 10 years of experience with 2 full-scale demonstrator in operation in 2 of the most promising floating winds markets, France and Japan. Both of them are in operation for more than 2 years, proving the floater [indiscernible] exactly as forecasted, doing absolutely no impact on the wind turbine performance, so with a fully proven technology now. We have one of the most knowledgeable team in the market, fully integrated of around 60 experts based both in France and Japan. We have build a sizable project pipeline as co-developer in Japan, Europe and the U.S., and we'll have a 30-megawatt project in the south part of France for which we expect the start of the construction as early at the end of this year. Slide 7.

Yes. With BW Offshore investing in Ideol, not only provides that BW Ideol with the offshore capabilities and experience and the global organization of BW Offshore, it also brings BW Ideol in the group of companies of the BW Group. And this [ 2 owner ] with a global maritime track record of more than 80 years of experience, leading maritime energy operations. The foundation of the BW Group is really in shipping but has expanded in past decades into energy as well with BW Offshore. And last year with the spin-off of BW Offshore with BW Energy as a niche E&P company with an integrated strategy. But also in past years with investment in Corvus Energy, Cadeler and the setup of BW Solar. Furthermore, BW Group has a long track record of listed companies in the offshore stock market with BW LPG, Hafnia, Epic Gas. I mentioned BW Offshore already since 2006, and since last year, BW Energy. Also Cadeler, the BW Group as an instrumental investment in that listing. So BW Ideol will fit very well in that group of companies. A bit more about the partnership of BW Offshore and Ideol. We acknowledged early that Ideol and BW Offshore have a unique but also very complementary competence and capacity. And that makes the combination of 1 plus 1 is 3 combination, and that will reinforce this and accelerate BW Ideol's leading position. BW Ideol, with the leading market technology of floaters, including the unique track record it already has with 2 units operating in the water in France and Japan, a scalable design which will drive cost down as turbines are expected to increase in size as well as size of wind farms in terms of number of floaters. Ideol has built up an experienced and integrated team over the last decade, and it has built up a global project development pipeline and partnerships. Scaling it up and industrializing it, we will bring the experience of BW Offshore with its deepwater experience and capabilities, and engineering, building, owning and operating floating production assets with a global organization and a global supply chain platform based on 4 decades of experience of more than 40 offshore projects, which includes the capabilities to deliver large-scale or large CapEx constructions, including the financing competence and the investor relations platform. Slide 9.

Offshore wind is going to be a key contributor to the energy transition. To meet the sustainable development scenario by 2040, we need as much as 560 gigawatt of offshore wind. But when you look at the global potential of offshore wind, the vast majority of it, above 70% is located in deep area above 60 meter, where traditional bottom-fixed foundation as currently used in the market, so many [indiscernible] are not applicable. The floating wind is key to unlock the full potential of offshore wind. In addition, by removing the water-led constraint, you can deploy assets further offshore, benefiting from a better wind resources, leading to substantial capacity factor between 50% and 60% and giving the possibility to develop projects with less potential conflict with other sea user like the fisherman. Finally, in addition, with floating wind, you can do the wind turbine integration in a port with an onshore crane without the need for specialized offshore installation vessel as it is currently done. And you have the possibility to [indiscernible] back the structure during the life of the assets in case a major maintenance needed on the wind turbine and to do this maintenance, again, onshore in the protected area. Slide 10. A very important point to have in mind is that around 80% of the costs are exactly the same between bottom-fixed offshore wind and floating wind. While using the same wind turbine, we have roughly the same interconnection costs. We have the same development costs. We have roughly the same operational and maintenance costs. So dry stick cost reduction that has been seen in the offshore wind industry over the last year is directly repeatable for the floating wind industry. Slide 11. BW Ideol is an early mover with a fully proven technology. We are the only patented technology in the market, the alternative solution on non-protected IP solutions. It is characterized by squaring that has very specific agronomic properties that gives the possibility to have, on the same time, a very compact, cost-effective and simple solutions, and at the same time, a solution that is sufficiently stable to deploy a standard to wind turbine without impacting the turbine production. It is suitable for any kind of environment. It could be deployed as shallow as 40-meter. We have 1 unit in operation in 43 meter in France. It could be deployed in to [ harshest ] environments. We have 1 unit in operation in [indiscernible] area in Japan, and it's independent to any wind turbine. It is fully proven with an excellent seakeeping performance, and it has been designed to be the most cost-competitive solution in the market, thanks to 2 key feature. First, the [ compacticity ] of the solution, it's the most compact in the market and its simplicity. Secondly, the possibility to manufacture the floater, both in sea and in concrete. And for [ exterior ] manufacturing, when you have to produce more than 50 units on one single project. The concrete manufacturing gives us the possibility to significantly reduce the cost of the solutions by using proven concession methods directly derived from [indiscernible] works like post extensions. Finally, with the very [indiscernible] the solution around 10-meter water draft means that it is compatible with many existing ports without the need to operate the infrastructure. So we can manufacture the solution on the key, put it in the water, do the wind turbine integration in support and tow it out, and we have identified adequate 40-plus offshore in all our key markets. Slide 12. The alternative solution includes mainly a spar buoy to [indiscernible] platform. All these alternatives have inherent drawbacks that cannot be overcome easily, reducing their potential application for floating wind. For example, with the spar buoy, you need at least 100-meter water depth to deploy the solution efficiently, meaning that you cannot address an important part of the market that is located between 50 and 100 meters, typically, the main market that you have in Scotland, in France, in Japan or Taiwan. And you are losing one of the key advantages of floating winds, that is the wind turbine integration in the port and the possibility to tow it back. You still need to do the wind turbine integration offshore with specializes. With the semi-sub, it's a much larger structure around twice the dimension of our solutions, with around 30% more steel in comparison to our solution when comparing with our floater and still, making it quite difficult to industrialize the production. While in our case, with a concrete floater, we can prove that we have the sufficient capacity to produce the number needed for a project. Building 1 single unit, big semi-sub for an oil and gas project is very different than building 50 units for 1 single floating wind project especially when you have several projects in [ private. ] [indiscernible] platform, you are transferring the loads coming from the wind turbine into the mooring system, inclining quite complex [indiscernible] procedures that aim to be realized [indiscernible] implying potential risk of [indiscernible] failures. This solution is less compatible with active systemic areas such as the Japan and California, and there is currently no demonstrator in operation for floating wind bed on the TLP. Slide 13. An important point to have in mind that BW Ideol is far more than just a technology supplier. We have obviously a proper [indiscernible] floating wind technology. But in addition to that, we have a lot of competencies and skill quite unique. We have competencies needed during the development phase of projects, so project development expense, better also, technical engineering experience, including the capacity to do the wind turbine coupling with the floater. And during the execution phase, we have a lot of experience in managing complex projects during the construction, during the installation in particular and more particularly through the partnership with BW Offshore. And all these competencies are quite key to have a very different offer propositions and to be able to secure partnership with leading utilities. And we have already signed such agreement in all our key markets, including Japan, France, California and Scotland. Slide 14, Marco.

Yes, as Paul already mentioned, our strategy is built on 2 -- dual-leg business model, one is the being the project developer and the co-owner in the wind farm, and the other is the EPCI delivery of the floater and the mooring system. As a developer and a co-owner of wind farms, there are 4 cash flow streams, basically. First of all, there is the -- there are the service agreements to the SPB, so the consortium -- the developing consortium for engineering, project management, construction supervision, et cetera, including maintenance. The second one is -- are the royalties for the technology of the floater. Third one is cash flow from operations itself post-COD. And the fourth is cash flow from divestments of ownership in the SPB in the construction. And there are typically 2 moments in the asset life cycle, where there is an opportunity to divest and recycle some capital earlier. One is after the project is completely developed. And just basically at FID, but prior to the EPCI phase. The second one is after or -- at COD or after COD, basically when the project has been delivered and derisked, and there is a period start with steady revenues, and that's a phase where infrastructure investors are interested to come in as the -- as they have a business model of low risk, low returns, and it provides us the opportunity to recycle our investments or at least partly before the end of the full life cycle. Next slide. The other lack of the strategy is the EPCI delivery. That's the EPCI business model where we deliver and install the floaters based on BW Ideol floater technology. And this delivery can be either under EPCI contracts, where we, together with the construction partner, deliver the floater or it can be through a leasing model, similar as for FPSOs, where we integrate basically the turbine and the floater and do a lease of the integrated facility. The EPCI contracts covers typically engineering, construction, supply and installation. And during -- in both cases, whether it's lease or EPCI delivery, BW Ideol takes the technical lead in the consortium. So it's in charge of engineering, the complete system design, the mooring system and supply chain and installation, leveraging the support of BW Offshore as well as the construction partners. Next slide.

So we want to leverage our early-stage leading position to meet ambitious 2030 goals around 4 pillars being involved in 10-gigawatt of gross portfolio of projects, of which around 15% in operation in 2030, with projects in all key markets, targeting a return on equity above 15%. To meet these goals, we'll be able to build on our existing pipeline and strong JV partnership to scaling and optimizing the technology, and extending the organization more globally, in particular, through the leverage with BW Offshore. Slide 17. We have already established a large and tangible pipeline of projects to achieve our growth ambition and build strong position in some key markets, namely France, Japan, U.K., California. In France, here we have 2 tenders for floating wind in the next 2 years, including a 250-megawatt for Brittany and 2x 250 megawatts for the Mediterranean area. We have quite a unique position in this market being the only French technology suppliers having an asset in operational track record. We are the only offshore wind turbine currently in operation in France. We are on track with the EolMed project to have the first project in operation on the maintenance costs. Both Floatgen and EolMed are in the direct vicinity of the upcoming area to be tender, giving us quite a unique return of expense. And we have the capacity to demonstrate that we can manufacture our floater in ports either in Brittany [indiscernible] costs, creating local value as expected by the French government. In Japan, around 5, floating wind demonstrator are currently in operation. Around these 5, one is based on Ideol technology. We are the only non-Japanese entity having been successful in the [indiscernible] assets in Japanese water. We have signed 2 joint development agreement, one we Orix and one with Japex. We have a team-based in Tokyo for more than 5 years. We have been involved in some strategic working groups to define the new certification rules that will apply for concrete floater in Japan and that will apply for scientific mooring system. We have signed an exclusive technology agreement with a leading local developer to supply your technology, and we have ongoing further negotiation for a further pipeline up to 2 gigawatt. In U.K., more specifically in Scotland, you have an ongoing tender for up to 10 gigawatt of offshore wind, of which around 5 gigawatt would be most probably based on floating wind foundations due to the water that's prevailing on these areas. We have team up with Elicio and BayWa for this tender. BayWa because they have a strong local footprint in Scotland, with close to 75% [indiscernible] to develop projects. And because they are currently managing close to 900 megawatts of onshore wind. Elicio because they have an experience in offshore wind. They are the majority owner and operator of the Norther wind farm in Belgium. We have again identified ports in Scotland where we can manufacture our floaters, we are signing an MOU with one of these port. We have signed an exclusive agreement for a new product development with Bridon Bekaert, a leading mooring line suppliers. The only one having factories in Scotland. So we are well on track to demonstrate again high local value creation in this Scotland tender. In Paris, there is an ongoing tender where we are positioned as a PCI contractor for a project in the north part of England, a 50-megawatt project with Blyth Phase 2. Finally, in California, we have a lot of potential developments that are currently limited by the global position of the Department of Defense against the development of offshore wind in California. We have been able to be the only one to secure an agreement in principle with the Department of Defense for a 40-megawatt pilot project in partnership and collaboration with an Air Force Base in Vandenberg Air Force Base to supply power to this base. We have submitted a lease application for this project to the California State Land Commission by the end of last year. So again, giving us quite a unique positioning in this strategic market. We have ongoing discussion on many other potential markets including Norway, South Korea, Spain, Ireland, China, Taiwan, or Italy. So we are well on track to reach our ambitious targets of being involved in around 10-gigawatt of offshore wind projects -- of floating wind projects by 2030. Based on this pipeline of projects, based on the fact that we have a fully proven and extremely competitive technology that can demonstrate local value creation. Thanks to our early mover position in the most attractive markets for floating wind, and now with the full support of BW Offshore, bringing an extensive track record of managing and delivering such complex of -- industrial offshore projects. Slide 19. So floating wind is a booming market, and we are quite uniquely positioned to be the leader in this market. We'll be extremely happy to answer any questions that you might have.

[Operator Instructions] As we have no questions at the moment through the phone, I will hand the word to the speakers.

Yes. This is Marco Beenen. We have a couple of questions that came in on the web. I will read them out loud and then we'll address them with our panel of Paul and Nicolas or myself. First question is, if BW Ideol was compared with Aker Offshore Wind, how is BW Ideol positioned compared to them? And Paul, you may want to answer?

Yes. So [indiscernible] one first obvious difference is that we are owning 100% of specific technology. Aker Offshore is now only around 47% of Principle Power. So with BW Ideol, we have full control on our technology. We have been able also to be at quite a unique positioning in some key markets like France and Japan. We are -- in comparison to Aker, we have been able to be successful, not only in Europe, but also in Japan, and we are the only non-European entity having -- non-Japanese entity that has been able to be successful in Japan. We can leverage on BW Offshore expense of leaving FPSO and the apply this leading model to the offshore wind industry. Marco, do you want to add anything?

No, I think that is well covered. I mean, obviously, we have the BW Offshore organization behind BW Ideol and the profile of BW Offshore is owning -- well, engineering, building, owning and operating assets. And that is that's our core business, which is not -- this is not a core business in Aker, and that's obviously a very important piece of the ambition to develop large-scale floating wind farms. So maybe that's the only thing I would like to add to that to your answers, Paul. Then moving on to the next question. One vital specialist component in your EPCI delivery will be floater mooring systems. First question is what chain dimensions are you typically operating with? And two, do you foresee that BW Ideol will secure supply of chains and mooring systems through investing in production facilities companies? You go first, Paul.

Yes. So what we have seen in most of our project is that it is much more cost efficient to use scientific mooring system so a mix of -- at the top and the bottom of the mooring line, small section of chains, but the main section is composed of [ plastic ] mine system, either nylon as we have deployed on unit operations from [indiscernible] or polyester. And it's -- yes, it has some advantage in terms of costs, but it's also sort of advantage in terms of capacity to deploy the solution to store much more efficiently to use scientific mooring system and chain for the number of kilometers that we have to deploy for a commercial scale project. In terms of supply chain, we have signed, as mentioned during the presentation, this an exclusive agreement with Bridon Bekaert to develop 20 new product with an exclusivity given on this new product to BW Ideol and also an exclusive access to the manufacturing capacity of Bridon Bekaert for this product in order to ensure that we have sufficient manufacturing capacity to deliver kilometers of the mooring lines that will be needed for large-scale projects. Finally, I think we've clearly leverage on the experience of BW Offshore that has deployed a large number of kilometers of mooring lines. And with track record and the experience of the long-term maintenance of such mooring lines.

Next question then, it's combined -- two questions combined. Basically, who supplies the turbines for your floaters? Or is it up to the customers to decide? And two, does your floater technology work with the new larger than 40-megawatt turbines?

So on the first section of the question, it's really the customer, the utilities that we decide which to manufacture to use on the project. So we are totally [ agnostic, ] and we can work with the main 3 wind turbine suppliers in the European market. We have, in particular -- more particularly decided to invest ourselves in the wind turbine for demonstrators. So we have [indiscernible] wind turbine, and we have done some modification to the control of the wind turbines itself. So in order to ensure that we have a full freedom and that we can share the return of experience of this demonstrator with also going to buy manufacturer in the market. This is not the case, [indiscernible] competitive solutions that have deployed their [indiscernible] in collaboration with wind turbine manufacturer, but giving them less freedom to work with [indiscernible] manufacturer. We have designed a solution to cope from day 1 with very large wind turbine. We expect wind turbine to be in the range between 15- and 20-megawatt around 2030. And as we have a very compliant and [indiscernible] solutions, it is perfectly compatible with this very large wind turbine, giving us some quite strong competitive advantage in comparison to other.

Good. Next question is, could you quantify the cost advantage of building in concrete versus steel? For you, Paul?

So we can effectively build a floater either in steel or in concrete. We have the unique collaboration in Japan is making steel. The one built in France is concrete. What we have seen and what we can demonstrate is that you have quite significant cost reductions linked to the manufacturing of the floater in concrete. When you have to build a large number of units. So typically, for 5 units, it's probably roughly the same cost between the steel or the concrete or potentially depending on the market appetite, it could be even cheaper in steel. But as soon as you are deploying a large number of units, above 10 units, it's more cost-effective to build it in concrete. And obviously, in addition, with the concrete version, you can demonstrate that you are creating value locally. You can demonstrate that you can manufacture the floater typically in France or in Scotland where it's clearly not cost competitive to manufacturer in steel locally.

I just want to add on what you said, Paul, the key competitive edge, I think that floating wind has is its scalability, and the scalability is achieved to standardize in fabrication, and that is much more efficiently done in concrete. And again, as Paul said, that you can do it at local sites. So this is a clear differentiator for floating wind compared to bottom-fixed offshore wind and also compared to other renewable energy sources. The next question, can you explain why your technology is more cost-efficient than Principle Power?

So it's mainly driven by several factors. First, when you compare apple to apple, so when you compare our steel floater with the steel semi-sub of Principle Power, we have a solution that is much more compact a round slice, more compact than the semi-sub, implying that we are using also obviously less steel than PPI. So implying some cost reduction linked to the manufacturing of the floaters. The second key advantage is that we can deal with the manufacturing both in steel and in concrete. And as we have just underlined, the concrete version of the floater give us significant additional cost-reduction potential when deploying several units and giving us the possibility to demonstrate the creation of local value. Typically, it's impossible to manufacture semi-sub in steel in France. It's not cost competitive and you don't have the infrastructure to do it. In our case, we can manufacture in concrete, and we have already [indiscernible] infrastructure when we can do the manufacturing. Finally, you have to keep in mind that the number of units that will be needed for floating wind -- for floating projects, it's quite a large number of units. And again, with concrete solutions, we have existing and prudent construction method that can demonstrate that we can manufacture the number of units that is needed for a large scale commercial project. For the steel manufacturing, it's currently much more difficult to identify construction yards in Europe that have the capacity needed to manufacture the number of units that are needed. Finally, we have much shallower draft. We just have a 10-meter water draft, meaning again that as soon as -- meaning again that it's compatible with any existing important infrastructure, but also implying that during the towing, we have a very stable solutions. So we don't have the temporary phase during the towing, where you have a floater that is divested, where it's -- it could be a challenging operation. You have typically one example of project floating wind demonstrator in Japan that has faced some difficulties during the towing due to ballasting and deballasting. And finally, in connection to that, we don't have an active system to give the stability to our floater. Everything is passive in our case. We are not using tons, and we are not pumping water from one point to another with the operational risks that are linked to this kind of [indiscernible] system.

Yes. Next question. So a couple of questions in one. I'll take them one by one. What characteristics about the France and Japan markets that makes them attractive versus other offshore wind projects we've seen in Norway?

So typically in Norway, currently, most of the production base is already renewable. So you have a need to deploy or deploying floating wind justify only with the perspective to export further for -- to other European countries, so with the need to deploy [indiscernible]. Like for Japan or France, you really have an internal need to add additional renewable energy production units. In France, notably because we have to replace in the coming years for existing production base that is mainly hedging nuclear [ portals ]. In Japan, also a bit the same concern that you have to switch first the -- you have to switch some existing nuclear capacity to renewable, but also because you have to switch from all production units or fuel production units to renewables. And on both fronts in Japan, the most attractive wind area where you have probably one of the best resources are located in relatively deep area while you don't have any other alternatives and to deploy floating wind.

And what government subsidiaries are available to you?

All the markets that we are targeting, you have forecasted our ongoing tenders dedicated to floating wind. So in France, the tenders are only dedicated to floating wind. So we are not in competition with alternative solution for this project. In Scotland, the U.K. government as recommended and announced recently that floating wind will be in a dedicated CFD pot. So floating wind is again not going to be competition with bottom fixed for Scottish project. And globally, as we have mentioned in the presentation, we are benefiting from the drastic cost reduction that has been seen in the offshore wind industry. We are sharing most of the costs with this industry, then we are using the same wind turbine and interconnection. And most of the costs are very similar, both in terms of construction and operation. So all the key drivers that have induced significant cost reduction in bottom-fixed offshore wind industry is directly replicable for floating wind. And currently, offshore wind is almost no-subsidy market. All the last tenders in France, in Netherlands, in U.K., have demonstrated that offshore wind is currently clearly within the market without the need for specific subsidy.

And additional question, how many competitors typically compete in these projects in France, Japan, U.K. and U.S., you mentioned?

So it has -- floating wind is a [indiscernible] marking market. You clearly have a lot of competition. So we expected a lot of few cities to have an interest in answering to these tenders. But at the end, the bottleneck is more on the floating wind technology that are proven currently. In Europe, you just have 3 technologies that have assets in operation. So you have technology used by Equinor. You have Principle Power, as previously mentioned, and you have BW Ideol technology. So you mainly have currently 3 competitors that can demonstrate to utilities that they have a proven technology. And that can give confidence to the utilities on the exact cost of the solution and the exact impact on the wind turbine production and on the exact operating costs and maintenance costs into these floaters.

Yes. And what percentage of the projects that you bid for you typically win?

We -- for all the reasons that we have presented towards our strong competitive advantage, we are targeting to have a market share around 40%.

Yes. Next question is with reference to today's press release, can you please elaborate on what you mean by the offer price being equal to the marginal price paid by the company in the acquisition Ideol? And is BW Offshore plans still to invest around EUR 60 million initially? So what we mean with that is that we -- the offer price is equal to what BW Offshore paid for its shares, at least the last batch of a significant portion of the shares that we acquired. And yes, BW Offshore has committed to invest a total of EUR 60 million combined, combined acquisition and private placements. Next question is it BW Offshore's intention to use the Ideol's concept to make the FPSO fleet cleaner? And if so, when can we expect first steps to be taken? I think the answer is yes. If we can also get our clients on board, as obviously, we'll also need conversation for that. We can't just do that on our own on existing contracts. But it is -- we have already dialogued with existing and new clients to explore the possibilities to, for instance, generate between 30 and 60 megawatts of power to 3, 4, 5 floating wind turbines more in the vicinity of an FPSO, depending obviously on the need of the power. So we see these opportunities. There are some dialogues that only works, I think, in -- with clients that have either their operations in countries where there is the CO2 tax coming or a client with very clear targets on emission reductions. When we can take the first step? Well, that does depend a bit on our clients as well. Again, this should be a joint effort. But I could see agreements happening on this topic in the next year or a year or 2. Could you please provide a breakdown of the 10-gigawatt pipeline? How much has already obtained the regulatory approval, signed contracts, et cetera? Are there other -- sorry, are there further potentials identified already? Paul, you may want to take it?

Yes. So globally, the commercial scale floating wind project is just emerging. So in 2021, you have the very first tenders for commercial wind projects, so with the tender in France, with the tender in Scotland. So obviously, floating wind projects of [indiscernible] ones are still in [indiscernible]. In between, you have pilot projects around 40 to 50 megawatt or between 30 and 50 megawatt, for which the development phase is more advanced. So typically, on our side, we are involved in [indiscernible] met projects that now almost fully consented and for which final investment decision is anticipated by the end of the year. We are also involved in a 40-megawatt project in California, where we have submitted these applications, so where the permitting is -- consenting is ongoing. And as we have mentioned, we are involved in a current tender for a 50-megawatt project in the U.K. for a project that has already received consenting.

Good. Next question. Yes. So how is the book building going? Well, I haven't got any feedback, but I can't comment in any case. But I'm confident it's going well. Prior to the private placement, did BW Offshore own 100% of BW Ideol or did BW Offshore have a lower stake in the company? Well, what I can say is that this is a combined acquisition and private placement. So -- but we took a majority stake and then combined this now with the private placement. And we have the target to own 50% -- around 50% of at the completion of the private placement. Sorry, was there something you want to add, Paul?

No. I think an important thing to keep in mind that the founders and the employees of Ideol are contributing their share to BW Ideol. So the [indiscernible] management team and founders are part of the transaction.

Yes. And expected ownership is around 20%. So it's still quite significant. Yes. Okay. We're going towards the end. If I could ask one more -- we got another question. Are there any performance advantages of steel versus concrete? Or is it just a cost advantage?

So the performance is [indiscernible] is exactly the same because we have the same dimension of floaters. So the [indiscernible] properties are exactly the same. Actually, it's more also an advantage during the operation. You have less maintenance linked to the concrete floater versus the steel one.

Yes. And then why the IPO? What kind of CapEx needs do you have if local construction contractors do the work? And if offshore wind clients tend to pay upfront? Well, you want to start, Paul?

Yes. So addressing the presentation, we have many -- 2 business lines. One is the EPCI contracting line and the other one is the co-development. During the co-development, so we are bidding together before our partners with that kind of projects, and we need to invest during this phase to develop the project. So an important part of the proceeds of the IPO are -- is being to developing this pipeline of projects. Why the IPO? It's probably because we are clearly at a turning point in the floating wind industry that is now booming with ongoing tenders. And it appeared to us that it's clearly a competitive advantage to -- and giving us more chance to win tenders -- ongoing tenders, especially Scotland or in France. If we can demonstrate that we have both the financial [ vessel ] and all the competencies that are needed, and the IPO is giving us this clear visibility on our strength and reinforce a chance to be [ award ] with projects in these tenders.

Yes. And briefly from BW Offshore perspective, I also want to emphasize that we are committed to build a renewable energy segment to floating wind adjacent to our FPSO segment. And we expect that BW Ideol will grow very fast, given the emerging market that we're seeing. And we want to make sure there's sufficient access to capital to finance that properly and cost effectively. And that's why we think IPO is the best structure to do steps and meet all those objectives that we have in the 2 segments. Last question, are there any plans for a future market floatation? You want to start, Paul?

Yes, I think it's probably linked to what we have just mentioned. We effectively expect that company will need further capital increase to develop the pipeline of projects. So we expect future market floatation.

Yes. I have nothing to add. That brings us to the end of this presentation. Thank you very much for your attention, and we hope you all join us in this exciting journey.

Thank you very much.