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Active Energy Group plc (LSE: AEG | OTC: ATVGF) has announced a significant milestone regarding its inaugural project in the UAE. The company has successfully pre-sold approximately 35% of its initial 8 MW energy capacity. This achievement highlights strong demand from clients in sectors such as AI data hosting and blockchain computing.
This pre-sale accomplishment, reached before the facility’s operational launch, underscores AEG’s effective market strategy.
With continued client interest, the company is optimistic about securing contracts for the remaining capacity in the near future. AEG aims to leverage its competitive advantage in providing ultra-low-cost energy from both renewable and traditional sources.
Table of Contents:
Financial projections and growth strategy
Current agreements indicate that the 8 MW facility is expected to generate approximately US$3.5 million in annual revenue, with an anticipated 50% gross margin. This translates to about US$1.75 million in gross profits. Management plans to reinvest these profits into further development phases, establishing a self-sustaining growth model that accelerates the company’s expansion while ensuring financial prudence.
Phased infrastructure development
AEG’s strategic entry into the UAE market employs a modular and scalable approach, allowing infrastructure development in 8-25 MW increments. This phased implementation offers several advantages:
- Rapid deployment:Operational capacity can be achieved in just a few months, compared to the years typical in conventional approaches.
- Cost efficiency:This strategy minimizes upfront capital requirements and reduces associated risks.
- Customer-driven growth:AEG’s expansion aligns with specific client demands, ensuring that growth is both relevant and sustainable.
With access to competitively priced energy, favorable regulations, and a strategic geographical location, the UAE is uniquely positioned as a global hub for high-performance computing and AI development. The demand for electricity has become a critical factor in scaling infrastructure in these rapidly evolving sectors.
Future outlook and sustainability commitment
Phase 1 of the project is set to commence construction imminently, with operations expected to begin before the end of the year. The robust revenue structure, bolstered by long-term hosting agreements, ensures recurring cash flows and a solid foundation for profitability.
Pathway to expansion
The profits from the initial phase will enable AEG to invest in subsequent phases, targeting an ambitious goal of reaching 100 MW of capacity in the near future. The company envisions a long-term strategy that includes developing over 300 MW in the UAE, part of a broader ambition to achieve a global capacity of 1 GW.
Moreover, AEG is committed to incorporating sustainable practices into its infrastructure developments. By integrating solar and hybrid renewable energy solutions, the company aims to meet the environmental, social, and governance (ESG) objectives of its clients and stakeholders, reinforcing its commitment to responsible growth.
Paul Elliott, CEO of Active Energy, stated: “This milestone is crucial for our company. Pre-selling 35% of our first site before construction has begun validates both market demand and our competitive positioning. With the projected annual revenue of US$3.5 million from this initial 8 MW site, alongside an anticipated US$1.75 million in gross profits that will fuel further expansion, we are establishing a strong, self-reinforcing growth cycle across our 300 MW pipeline in the UAE.”
“We are confident that the site will be fully contracted before it becomes operational, reflecting the strong market appetite for reliable and cost-effective infrastructure. Our modular approach equips us to respond swiftly and effectively to this growing demand, laying the groundwork for substantial shareholder value over the long term.”
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