J P M O R G A N Asia Pacific Equity Research 06 December 2025 This material is neither intended to be distributed to Mainland China investors nor to provide securities investment consultancy services within the territory of Mainland China. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. Yangtze Power - A Virtual meeting takeaways – steady as she goes; Maintain OW Mgmt maintains full-year hydropower generation targets for 2025: Water ...

Core Insights - Hydro has made a significant investment decision for its largest hydropower project in over 20 years, the Illvatn pumped storage power plant, with construction starting in November and operations expected by 2030 [1][2]. Investment Details - The gross investment for the Illvatn project is NOK 2.5 billion, with a net investment after tax estimated at NOK 1.2 billion due to Norway's cash flow tax scheme for hydropower investments [1]. - The new plant will generate 107 GWh of annual renewable power, specifically for Hydro's aluminium production [1]. Project Features - The pumped storage plant will enhance energy production and reservoir capacity by pumping water from Fivlemyrane to the Illvatn reservoir, increasing total production during high-demand winter months [3]. - A new 13-kilometer power line will be constructed from Fivlemyr to Sveinsøystølen, utilizing aluminium for the power towers to promote sustainable grid development [4]. Industrial Impact - The Illvatn project is crucial for Norway's industrial development, providing renewable energy necessary for reducing emissions and supporting new industries [5][6]. - Hydro aims to ensure competitive power prices for its aluminium plants through increased and flexible hydropower production [6]. Environmental Goals - Hydro's current aluminium production has a carbon footprint approximately 75% lower than the global average, with a goal to achieve zero carbon aluminium by 2050 [7].

Core Viewpoint - Mass Megawatts has developed a new hydroelectric technology that promises a quick financial payback, potentially transforming the energy marketplace with fewer barriers to entry compared to previous products [1][2]. Group 1: New Technology Overview - The new low-cost Hydroelectric Power System can achieve payback in less than two years at optimal locations, utilizing significantly less than 50% of the materials and initial engineering requirements compared to traditional hydropower plants [2]. - The Hydro Multiaxis Turbosystem, or Hydromat, features a tower structure with multiple smaller blades connected to various shafts, leveraging water's density to enhance power generation efficiency [3][4]. Group 2: Design and Engineering Advantages - The design of the Hydromat simplifies blade construction by using smaller blades, which reduces costs and engineering complexities associated with larger blades [4][5]. - Smaller blades lead to lower material usage and reduced weight, as the weight of a blade increases with the cube of its length, while power output increases only with the square of its length [5]. - The new system reduces vibrations and mechanical stress, enhancing the longevity of components like bearings and allowing for the use of standard off-the-shelf parts, which mitigates supply chain issues [6]. Group 3: Efficiency and Performance - The Hydromat technology allows for a higher aspect ratio, improving efficiency by maintaining a large swept area with a low rotor diameter, thus reducing inertia and energy expenditure [9]. - The use of multiple smaller blades per shaft overcomes imbalance issues associated with traditional single-blade designs, resulting in a more durable and efficient turbine [9].

Core Insights - Statkraft's third quarter results in 2025 showed a decrease despite higher production, primarily due to low prices in Northern Norway, reduced contributions from Markets, and negative hedging effects [1][6][11] Financial Performance - Power generation in Q3 2025 was 15.8 TWh, an increase from 13.3 TWh in Q3 2024, with record-high generation of 52.7 TWh in the first nine months of 2025 [7][10] - Net operating revenues for the quarter were NOK 8.0 billion, down from NOK 9.8 billion, while underlying EBITDA decreased to NOK 3.1 billion from NOK 4.9 billion [7][11] - Net profit for the quarter was NOK -0.7 billion, compared to NOK -0.2 billion in the previous year [7][14] Strategic Developments - Statkraft executed a refocused strategy by signing agreements to divest assets worth approximately NOK 13.5 billion, including district heating, transmission lines in Peru, and renewable energy assets in multiple countries [1][3][7] - The company aims to reduce complexity and costs while freeing up capital for growth in prioritized technologies and markets [2][3] Market Operations - The average system price in the Nordic region was 36 EUR/MWh, an increase of 16.2 EUR/MWh from Q3 2024 [9] - Market activities experienced lower levels compared to a strong previous year, with underlying EBITDA from Markets dropping to NOK 20 million from NOK 1.4 billion [12][8] Future Investments - Statkraft plans for a long-term investment capacity of NOK 16-20 billion per year, focusing on solar, wind, battery storage, and grid services in Europe and South America [4][5] - Significant investments will also be allocated to hydropower refurbishments and new onshore wind developments in Norway and Sweden [5]

[Music] Raised over the last century as icons of engineering and for the taming of mighty rivers for hydropower facilities and water supplies. >> Engineers have radically changed the Inland Empire. >> Here in the United States, increasing numbers of dams are reaching end of life status.no longer fit for purpose, too expensive or too dangerous to operate. Of course, many monuments from that era still stand as viable important sources of water, like this dam founded more than a century ago outside San Francis ...

Core Points - The Three Gorges Reservoir has achieved its 2025 target of reaching a water level of 175 meters, with an effective storage capacity of 22.15 billion cubic meters [1][3]. Group 1 - The Three Gorges Reservoir has successfully reached the 175-meter water level for the 14th time since its initial filling in 2010 [3]. - This achievement lays a solid foundation for the reservoir to effectively provide water supply, ecological benefits, power generation, and navigation during the upcoming winter and spring seasons [3].

Core Viewpoint - Laos is planning to halt electricity supply to cryptocurrency miners by the first quarter of 2026 to redirect power to more economically beneficial industries such as AI data centers, metals refining, and electric vehicles [1][2]. Group 1: Electricity Supply to Cryptocurrency Miners - The current electricity consumption by crypto miners in Laos is approximately 150 megawatts, which is a 70% reduction from a peak of 500 megawatts in 2021 and 2022 [2]. - The government initially considered ending the supply to crypto miners in 2023 but continued due to increased hydropower output from abundant rainfall, allowing for exports to Thailand and Vietnam [4]. Group 2: Economic Impact and Industry Value - The deputy energy minister stated that cryptocurrency mining does not create significant value compared to supplying electricity to industrial or commercial consumers, as it generates few jobs and lacks a beneficial supply chain for the economy [3]. - The shift in focus towards more productive sectors is part of Laos's strategy to enhance economic growth and sustainability [1][3]. Group 3: Hydropower and Regional Energy Transition - Laos is recognized for its hydropower export potential, playing a crucial role in the clean energy transition in Southeast Asia, particularly for countries facing challenges in scaling up solar and wind energy [5]. - The country is considering increasing its bilateral hydropower export capacity to Vietnam from the current 8,000 megawatts [5]. Group 4: International Relations and Arbitration - Laos is engaged in bilateral discussions with China regarding an arbitration suit related to unpaid dues from a hydropower project, amounting to $555 million [6].

Core Insights - The Isfayram Hydropower Real-World Asset (RWA) successfully completed a $1 million on-chain fundraising round, increasing the circulating market capitalization of its native token, IHP, to over $10 million [2][3] - IHP's price surged by 261% within 24 hours of the fundraising, indicating heightened trading activity and investor confidence in blockchain-based sustainable infrastructure financing [2][3] Fundraising and Token Details - The fundraising was conducted through PicWe, an omni-chain RWA infrastructure on BNB Chain, allowing for on-chain fundraising and liquidity supported by the stablecoin $WEUSD [4] - Investors in IHP are entitled to an annualized yield of approximately 20%, derived from electricity revenues generated by the hydropower station [5] - The funds raised will support Phases II to V of the Isfayram Hydropower Project, enhancing renewable energy capacity in Kyrgyzstan [5] Project and Economic Impact - The Isfayram Hydropower Project is pivotal for Kyrgyzstan's clean energy goals, with the first construction phase completed and initial generating units operational [5][11] - Kyrgyz leadership emphasizes hydropower development for national energy independence and economic modernization, with President Sadyr Japarov highlighting job creation and long-term economic transformation [6] Trading and Investment Structure - IHP is tradable on PicWe DEX, utilizing a Bonding Curve and Treasury Floor Price mechanism to provide automatic downside protection for investors [7] - The Initial RWA Offering (IRO) model adopted by PicWe embeds fixed-income obligations into smart contracts, reducing default risk and enhancing capital efficiency [8] Industry Significance - The Isfayram Hydropower Project is the world's first hydropower-backed RWA to raise capital on-chain, showcasing a new approach to financing sustainable infrastructure through blockchain technology [9] - PicWe aims to bridge real-world assets with digital markets, supporting the compliant and scalable growth of tokenized assets across the decentralized economy [10][13]

Core Insights - PicWe has partnered with the Isfayram Hydropower Project to introduce the world's first hydropower-backed Real-World Asset (RWA) in the Web3 ecosystem [2][3] - The Isfayram-1 hydropower plant in Kyrgyzstan generates approximately 22.9 million kWh of clean electricity annually, resulting in over 1.15 million USD in annual revenue [3] - Investors can purchase digital shares through PicWe's IRO platform, yielding around 20% APY, linking digital finance with renewable energy production [4] Company Overview - PicWe is a global infrastructure platform that connects real-world assets with digital investment opportunities, aiming to build a global on-chain investment economy [10] - The platform combines real-world asset verification, decentralized liquidity, and cross-border compliance [10] Project Details - The Isfayram Hydropower Project is a multi-phase initiative designed to support Kyrgyzstan's transition to sustainable energy, with five hydropower stations planned [5] - The first two phases of the project are either completed or under construction, adhering to international GB/T standards [6] Investment Model - The Isfayram-1 asset is structured as an equity-style RWA with an estimated market cap of 10 million USD at launch [6] - Key benefits of the RWA model include stable returns tied to electricity generation, transparent on-chain performance tracking, and liquidity through decentralized secondary markets [7] Revenue Distribution - Revenue from power generation will be shared, with 80% allocated to market makers and 20% supporting the operational development of Isfayram [8] - As additional hydropower stations become operational, more tokens will be introduced, expanding the ecosystem of green energy-backed digital assets [8] Regulatory and Compliance - The project operates under Kyrgyz renewable energy law, ensuring compliance and transparency for investors [7]

Project Overview - The Grand Ethiopian Renaissance Dam (GERD) project, Africa's largest hydropower project, is now operational, costing an estimated US$5 billion [1] - The dam is designed to generate just over 15,700 gigawatt hours annually [1] Economic Impact - Ethiopia anticipates significant economic benefits, including industrialization, with the industry sector growing at an annual rate of 10% and energy demand from the industry sector growing by 40% yearly [5][6] - The GERD is projected to generate $1 billion in revenue annually from power exports, a substantial amount compared to the $8 billion generated from total commodity exports in the past fiscal year [7] - Ethiopia currently exports power to Djibouti, Kenya, and Tanzania, with these countries expressing interest in purchasing more power [8] - Bitcoin mining companies, particularly from China, are increasingly choosing Ethiopia as a destination due to the dam's power supply, with 25 operational companies connected to the national grid and 20 more in the pipeline [8][9] - The government plans to use revenue from power exports to improve national electricity coverage, aiming to connect half of the country's 130 million population, especially those in rural areas, to the national grid [10] Geopolitical Considerations - The construction of the GERD has caused diplomatic tensions between Ethiopia and downstream countries, specifically Egypt and Sudan [2][11] - Negotiations between the three countries regarding the operation and water filling of the dam have been unsuccessful, even with mediation efforts from the US and Saudi Arabia [12] - The reservoir has captured approximately 74 billion cubic meters of water, raising concerns in Egypt about reduced water flow [13] - Egypt is considering appealing to the UN Security Council for action, while Ethiopia maintains its commitment to continued negotiations and denies any intention to harm the downstream countries [13][14]