Third quarter report 2026

Renewable energy markets:
Electricity demand across our markets is set to grow over the coming decade, driven by the electrification of industry and transport and the rapid build-out of data centers. At the same time, energy security has moved higher on the political agenda, strengthening the strategic case for domestic renewable capacity. In the transaction market, buyers have become more selective and are concentrating on projects with secured or clearly defined grid connections, low permitting risk and a short path to ready-to-build. Such projects continue to attract solid interest and competitive pricing, while earlier-stage projects face longer processes. This supports our strategy of maturing projects to a sales-ready stage with clear grid visibility before bringing them to market.

Sales processes for renewable energy projects:
We expect ongoing sales processes to materialise in sales during the coming months. Approximately 2,500 MW of renewable energy projects are either already in a sales process or ready for the process to commence. Although timelines have been extended in some processes, we have live dialogues with credible bidders across our regions and technologies and remain confident that the quality of our portfolio will be reflected in the outcomes we achieve. Grid capacity remains the main bottleneck for new renewable capacity. As the supply of substation and transmission line components ramps up, more projects can be connected, which is expected to increase demand for renewable energy projects. To maximise value, we aim to sell projects once a firm grid connection date has been secured, even where this means a longer sales process.

Developments in South Africa:
South Africa remains a significant contributor to our sales pipeline. According to BloombergNEF, 2026 is expected to be the first year in which corporate power purchase agreements (PPAs) account for more new renewable capacity than government auctions. Together with rising Eskom tariffs, the planned retirement of coal-fired power stations and improving renewable competitiveness, this supports long-term demand for wind, solar PV and BESS projects.

The availability of grid components, such as transformers and substation equipment, will be a key enabler of demand, as will the full separation of the National Transmission Company South Africa (NTCSA) from Eskom. A fully independent transmission operator is expected to improve grid access and support private investment in new transmission capacity. In the near term, opportunities favour battery storage, supported by the government’s plans to procure an additional 4.6 GW of BESS, as well as hybrid solar-plus-storage and wind projects in areas with available grid capacity. Broader deployment will depend on grid expansion, where the Independent Transmission Projects Programme is opening up for private investment. The planned South African Wholesale Electricity Market (SAWEM) is a further step towards a more competitive market, with new opportunities for private generation and trading.

The 153 MW Red Sands BESS project, sold in 2023, is under construction. Another solar-plus-storage project at 100 MW previously sold by AGV has received a favourable Cost Estimate Letter (CEL), pointing to a near-term grid connection. Further de-risking of the project will trigger milestone payments to Magnora. This progress demonstrates the quality of the projects developed by our South African team. In October, AGV announced its expansion into data center development, building on its local development platform and the Group’s data center expertise.

Developments in UK:
In April 2025, the Office of Gas and Electricity Markets (Ofgem) approved a reform of the grid connection queue, run by the National Energy System Operator (NESO). The old “first come, first served” system was replaced by “first ready and needed, first connected”. Every existing and new project had to show readiness. Projects that met these criteria received “Gate 2” status. Their queue position and connection dates are being re-issued in a reordered queue, and projects that did not qualify were moved to the back. Magnora’s two projects in Northern England, where Northern Powergrid is the network operator, both received Gate 2 Phase 2 status. NESO and the network operators are issuing updated grid offers in stages. Under the timetable last confirmed with Ofgem, Phase 2 offers to distribution-connected projects are issued area by area between mid-October 2026 and mid-March 2027. Our projects’ updated offers from Northern Powergrid are expected in that window. Each offer will confirm the connection date, the scope of works and the cost, and will set its own acceptance deadline. Based on the latest information from the grid company, we expect grid connection availability for both projects in 2028, subject to the terms of the updated offers. When updated grid offers are received, the projects are considered Ready to Build, and ready for divestment.

Data center markets:
Demand for data center capacity in Europe continues to grow, driven by AI training and inference, cloud expansion and national ambitions for sovereign AI capacity. Access to power has become the main bottleneck for new capacity, making sites with secured grid connections scarce and increasingly valuable. The Northern European region is well positioned, with renewable power, a cool climate and competitive electricity prices, and is attracting multi-hundred-megawatt projects. In Italy, the Milan area is one of Europe’s fastest-growing data center hubs. Magnora Data Center’s strategy is to secure land, power and permits early, and to monetise projects through sales, partnerships or retained ownership. Hämeenlinna, with its grid connection agreed and now sales-ready, is the first project to reach this stage, and we see strong interest from operators and investors. With the added Risti project in Estonia and projects in Oslo, the DC portfolio is well placed to benefit from continued market growth.

Financial position and cost structure:
The Group’s cash position remains solid. At the end of Q3 2026, the renewable part of the Group held NOK 173.5 million in cash, while Magnora Data Center ASA and its subsidiaries held NOK 568.6 million. Combined, these cash resources provide a strong platform to fund committed and planned investments across the project portfolio, while retaining flexibility to pursue new opportunities. The cost base of the renewable business has improved significantly. Group operating expenses net of intra-group charges are down to NOK 11.3 million this quarter, and we expect to maintain this level in the coming quarters.

Future income from sold projects expected over the next years:
Earnouts, revenue-sharing arrangements and milestone payments from previously sold projects and companies are expected to provide Magnora with substantial income through to 2029. Such income requires no investments or costs from Magnora.