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Good morning. My name is Heidi, and I will be your conference operator today. At this time, I would like to welcome everyone to the BEP Q3 2018 Earnings Call and Webcast. [Operator Instructions] Sachin Shah, Chief Executive Officer, you may begin your conference.
Thank you, operator. Good morning, everyone, and thank you for joining us for our third quarter 2018 conference call. Before we begin, I'd like to remind you that a copy of our news release, investor supplement and letter to shareholders can be found on our website. I also want to remind you that we may make forward-looking statements on this call. These statements are subject to known and unknown risks, and our future results may differ materially. For more information, you're encouraged to review our regulatory filings available on SEDAR, EDGAR and on our website. We continue to advance our long-term strategic priorities for the business. We have raised or expect to raise approximately $850 million in net proceeds by the end of the year, primarily by opportunistically recycling capital for mature or non-core assets. These initiatives will increase our total liquidity to over $2.3 billion once completed. These asset sales are at value significantly higher than those reflected in our public unit price, demonstrating the unique attributes of our business relative to the broader industry. We reported 18% FFO growth and 18% adjusted FFO growth from our operations on a per unit basis, reflecting both margin expansion and growth-related initiatives. Finally, we advanced approximately 130 megawatts of development wind and hydro, at returns in the range of 20% supporting our investment activities. Overall, our strategy remains the same. We look for investment opportunities in our core markets globally, where we can surface 12% to 15% returns on a per unit basis using our operational expertise. We maintain strong access to public and private sources of debt and equity, an investment-grade balance sheet and surface value through the monetization of mature assets. This strategy has served us well for almost 20 years and our business has been resilient through multiple investment cycles, and the numerous investment trends that have permeated the renewable power sector over that time. As a result, we have delivered a 15% total return on a per unit basis to our unitholders since our inception in 1999. We continue to see a strong appetite for renewable assets across the globe. Our asset-recycling program demonstrates the significant value high-quality assets attract in the private markets. In particular, the recent sale of a minority interest in certain of our hydro assets in Canada was completed at a valuation in excess of 15x EBITDA, based on the contracted price of the portfolio or well in excess of 20x, using current spot energy and capacity prices. This value reflects the perpetual nature of our hydro assets, combined with their unique ability to store power and deliver energy and capacity during high demand periods. Recently built contracted wind and solar assets in North America and Europe also regularly transacted mid- to high single-digit returns. In contrast to hydro assets, however, these assets have largely fixed revenue streams that typically do not grow with inflation and a much shorter asset life. Accordingly, we would expect valuations to soften as interest rates rise. As a result, we continue to be patient and look for situations that require operational, development or recapitalization expertise. In the emerging markets, significant volatility driven by weak public equity market valuations, reductions in subsidies, particularly in China, where the government support solar has decreased recently and continued demand for electricity is driving the need for long-term capital. Investors with strong operating expertise, patient capital and a long-term outlook should benefit in this environment. Finally, we are seeing the valuation of public stocks in the U.S. diverge from U.S. private market valuations. We believe this is largely due to investors prioritizing near-term distribution growth over long run asset, earnings and balance sheet quality. This focus on near-term distributions, combined with rising rates, has led to significant stock price pressure across all renewable issuers with the most likely long-term impact on those companies in the sector with weak balance sheets and shorter duration assets. We believe this public-private market dislocation will provide meaningful opportunities for value-focused investors who have strong balance sheets and significant access to capital. I'll now turn the call over to Wyatt, to discuss our operating results and financial position.
Thank you, Sachin, and good morning, everyone. We reported funds from operations of $105 million or $0.33 per unit in the quarter. This represents a year-over-year increase of $14 million to FFO as the business continues to benefit from recent acquisitions, development projects coming online and margin enhancement initiatives. Our hydroelectric segment contributed $104 million to FFO. While generation was below long-term average levels in certain geographies this quarter, we benefited from selling power stored in our reservoirs during high-priced periods. In the U.S., this active marketing of power allowed us to capture prices in the range of $60 per megawatt-hour; while in Brazil, short-term power sales were at close to BRL 500 per megawatt-hour or approximately USD 165 per megawatt-hour. In Colombia, we continued to execute on our business plan and signed 12 new multiyear contracts at prices above the current spot prices. Our wind segment contributed $29 million to FFO, which is nearly double relative to the prior year as we benefited from recent acquisitions. Although wind variability is a reality of our business, our global scale provides significant resource diversity benefits as overall generation was in line with plan. For example, weaker wind resource in the U.S. and Ireland was largely offset by our performance in Brazil. Our solar, storage and other segments contributed $42 million of FFO, in line with expectations, reflecting stable resource and revenues tied to availability rather than generation. We continued to advance our global development pipeline. A highlight was that we commissioned a 28-megawatt wind farm in Ireland this quarter. We also progressed an additional 19 megawatts of wind in Scotland, 49 megawatts of small hydro in Brazil, and a 63-megawatt expansion of a pump storage facility in the U.S. Together, these projects are expected to contribute $17 million to FFO on an annualized basis starting in the fourth quarter of 2018. We're also advancing an additional 176 megawatts of advanced stage development through permitting and contracting. We continued to pursue a tuck-in asset strategy in Europe, closing the acquisition of a 23-megawatt wind farm in Ireland subsequent to quarter end. We expect to complete approximately $1 billion of asset sales and upfinancings by the end of the year, which would generate net proceeds of $850 million to BEP. As of the date of this report, we have executed on over $500 million of these initiatives. In total, this will increase our available liquidity to over $2.3 billion as we enhance our financial flexibility in the current investment environment. During the quarter, we issued a CAD 300 million corporate green bond. The issue was priced at 4.25%, which is 100 basis points below the corresponding maturing debt. As a result, we now have no material maturities over the next 5 years, and the weighted average term of our debt is over 10 years. We also generated liquidity from continued execution of our capital-recycling program that will allow us to surface value for mature assets and redeploy capital into higher growth opportunities. Subsequent to the end of the quarter, we sold a 25% interest in a 413-megawatt portfolio of 3 Canadian hydroelectric assets. We will retain management and operating responsibilities for the portfolio. We also intend to sell an additional 25% interest in these assets to another group of investors prior to the year-end. Additionally, we progressed the sale of our 178-megawatt wind and solar portfolio in South Africa. In order to facilitate the sale of the interest in our Canadian Hydro portfolio, we have taken the opportunity to internalize our power marketing capabilities in North America, previously provided by BAM into BEP's operations consistent with our internalized power marketing capabilities in other parts of the world. This internalization required amending certain existing agreements. Firstly, we aligned the PPA price received by BEP from BAM with the underlying third-party contracts associated with these assets. This will increase the price BEP receives for its Ontario portfolio by CAD 16 per megawatt hour. BEP has also been granted the option to extend the contract at its Great Lakes power system in 2029 to 2044 at a price of CAD 16 per megawatt-hour. BAM will also transfer to BEP all of its other PPAs with the exception of those in New York. As all future energy marketing capabilities will be internalized, we are eliminating all energy marketing fees paid to BAM. In exchange, our current PPA price for BAM for our New York assets will be reduced by approximately $3 per megawatt hour, each year between 2021 and 2026. We continue to focus on executing our key priorities, including advancing, contracting and cost-saving initiatives, and building other development pipeline. We also continue to assess acquisition opportunities across our core technologies and geographies. In September, we held our annual Investor Day in New York, where we took the opportunity to update unitholders on the investment environment, the strength of our balance sheet and operate initiatives that we have undertaken at our recent acquisitions that demonstrate how our operating expertise can drive significant value. We would like to thank those of you who were able to attend this event. As always, we remain focused on delivering our unitholder's long-term total return of 12% to 15% on a per unit basis. We thank you for your continued support, and we look forward to updating you on our progress in that regard. That concludes our formal remarks. Thank you for joining us this morning. We'd be pleased to take your questions at this time. Operator?
[Operator Instructions] And your first question comes from the line of Rob Hope with Scotiabank.
Maybe if we could start off on the internalizing of the power marketing contract. The disclosure said that it was done on a value-neutral basis for BAM and BEP. I'm just wondering if you can provide some additional clarity on the puts and takes on the cash flows though, because it looks like you're getting some upfront cash flow, but it could potentially push off some longer-term cash flow there.
Sure. It's Sachin here and I'll let Wyatt jump in as well, if necessary. I think first, a couple of things. One is, as we were contemplating selling an interest in the Canadian portfolio that we ultimately did, to do that, we needed to harmonize the underlying third-party contracts we have in Canada with the contracts that them ultimately had from BAM -- or BEP ultimately had with BAM. And so as a result, that simple harmonization meant that we're receiving all the benefits upfront. However, we just made the decision from a BAM perspective as sponsor to make sure that if we're going to reduce cash flows that BEP receives, we do it over time. And simply put, I think that's just the benefit of having a good sponsor in BAM, who's always looking out for the long-term interest of the business and making sure that if we're doing something positive like selling assets at a good valuation and bringing cash into the treasury, that we also consider the long-term implications and manage that through in a proper way. Obviously, all of that was then reviewed by the independent members of our board, who had independent financial advice and legal advice, which is why we made the point of saying it was done on a value-neutral basis.
All right. And then just moving over just to the monetization and kind of the increasing liquidity there. Is this being done just in advance of your expectation that you will see increasing opportunities, I guess, in China emerging markets as well as some U.S. public equities or are you well down the path and have identified targets there?
A little bit of both. I think what we're seeing right now is we have a strong investment pipeline first and foremost. And we can never say whether those things materialize or not. It's always difficult to predict that. However, we do have a very, very strong investment pipeline and in large part, that's because there's significant market volatility. Many of our public peers don't have a strong access to capital. And so we think that there might be a window here, where competition decreases. And then obviously, with rising rates, we just think having cash in light of investors eventually catching up and looking at that value in a more normalized way is just a really positive position to be in. So we just think we're going through a period right now, where you want to have significant financial resources and you don't want to lean on or pick the hole into, in particular the public markets where there's lots of volatility. And we feel like we've achieved that with completing $500 million of asset sales and bringing cash into the treasury, and then having another few hundred million that we're going to bring in by the end of the year.
And your next question comes from the line of Sean Steuart with TD Securities.
In light fashion of the commentary you had on the gap between public and private valuations for hydro, can you speak to your willingness to monetize more of your North American Hydro? And if there is an appetite, should we envision it as selling down minority stakes of what you already have and retaining control of the assets? How do you think about that?
Yes. I think it's a good question. Look, I wouldn't suggest that we're only going to look at Hydro. I think we obviously will be responsive to where market demand exists. I think what's going on right now, though, is that investors who understand Hydro recognize the benefits. The large benefit with Hydro is obviously the life cycle of it. When you have a 100-year asset, you have a strong return on your investment. You don't have really any return of capital coming through on an annual or quarterly basis. And so you've got a preservation of capital strategy. You have cash flows that grow over time, and you have value that grows over time. And that's completely opposite to wind and solar, which need to be replaced every 25 to 35 years, depending on your view of the asset life. So the bid in the market is very strong, and the bid comes from financial investors and strategics, who have owned and operated Hydro before. So obviously, that's a really strong candidate for us to monetize partial interest as you suggest. I think the reason we often entertain minority sales is because given our reputation, most counter-parties actually want us to continue to operate the plant. We've a good, long history of operating these very efficiently, at a low-cost basis and also, optimizing the cash flows by selling power. So more often than not, we actually get inbound requests for buying partial interests with us continuing on as operator. And I think that's the theme you will see over the next number of years, as we rotate capital around the portfolio.
Great. One administrative question for Wyatt. Your table in the disclosures shows pro forma liquidity increasing by about $650 million to $2.3 billion. You guys referenced net proceeds of $850 million via the asset sales and upfinancing activity. Can you reconcile those 2 numbers? What am I missing there?
Yes. There was about $200 million of upfinancings that are in our liquidity at the quarter end, and so the $650 million of incremental pro forma is for the overall asset sales.
And your next question comes from the line of Andrew Kuske with Crédit Suisse.
I think the first question is for Wyatt. And this is just on your contract profile on Slide 15 in the supplemental and if we look on a sequential basis, sequential quarters that is Q2 versus Q3, bit of a lift across the board in average megawatt-hour pricing in all the years except 2020. What's driving those numbers? Is it just improved power markets, inflation? If you just give us a bit of a breakdown, that would be appreciated.
So, Andrew, just to clarify, you're saying why it's sequentially kind of through '19, '20, '21, '22, why are we -- why is the average contract price increasing?
Yes. You're basically getting the lift across the board. Is it inflation?
Yes. So that comes broadly from inflation, indexation of our contracts, especially with the new contracts that we signed for our Ontario fleet, they escalate at 3%, so that's a incremental benefit. Also, we do have some lower-priced PPAs that are falling away over that period. So it's a mix of those 2 things that's driving that growth over time.
Okay. That's helpful. And then just on the monetization of the Hydro. How far can you push that model? And is it something akin to what we've seen on another Brookfield company being Brookfield Property Partners, where we've seen 90% interest in certain buildings being sold to third parties, but Brookfield still managed a building? Would you push the model that far?
Yes. Andrew, the simple answer is yes. We would push the model that far. I think, obviously, this is a really valuable source of capital that we have on our balance sheet. And if we're in the business of generating 12%, 15% returns, if we have assets where we've done all the work, we've put in contracts, we've optimized the capital structure, and we've protected the assets with good investment over the years, that the market would value at a higher multiple and a lower overall return, we should sell those. That's the right thing to do. And we would absolutely consider pushing that all the way up to a very, very high level of sale with a small interest and a continuing role in the operations if that's what people benefit. We're opportunistic as you know, and so we never hold ourselves to any particular threshold that we don't think is reasonable.
And then maybe just as a follow-up, given that kind of dynamic and the delta, and what you've sold assets for versus where the stock is trading, to what degree would you push share buybacks?
Yes. It's a great question. I think we have our normal course issuer bid in place. And obviously, as I said in an earlier comment, we're starting to hold onto our cash harvested and look for opportunities. That would be one of the opportunities that we are looking at, no different than looking at investment decisions around assets, businesses or various portfolios. Buying back our stock is just another investment and is another capital allocation tool we have at our disposal. So as we see public market valuations continue to deteriorate, it's obviously something that's on our radar and we would consider as part of the overall strategy of generating the appropriate return for our shareholders.
Your next question comes from the line of Mark Jarvi with CIBC Capital Markets.
Just wanted to go on a comment about that option for extending the contract at Great Lakes Power. Maybe you can provide more color in terms of, is there any concessions that you have to make on pricing before 2029 if you exercise that option? Or is it just you could extend contract beyond 2029?
It's just a simple option to extend, and it's really meant to protect that in the event that markets are weak during that period and it gives BEP effectively the ability to ensure that its cash flows are stable, post the 2029 period. It sets a bit of a floor price. So, obviously, our view would be that power prices would be higher than that at this stage overall, but this just gives BEP a little bit of insurance.
Okay. And then in terms of just the net impact on the corporate costs by terming the marketing agreement, so you'll absorb some of those marketing costs directly. So I'm just wondering it should be sort of neutral from a cost profile?
Yes. It's largely neutral. I think over time, as we've created more efficiencies in the business, what you get now is those efficiencies will actually fall to BEP's bottom line. So before, it was really just a simple fee that BEP was paying BAM. And I think what we have now is the opportunity to look at that business, make sure it's being run efficiently. And to the extent that we can drive cost savings, those cost savings run through BEP's bottom line, and that's great upside for BEP shareholders.
Okay. That's helpful. And then just on the U.S., the New York Hydros and the step down of pricing over time, can you just walk us through in terms of how other revenue streams like capacity, payments, ancillary revenues work with that, in terms of what you would expect for realized pricing for those assets as the contract with BAM steps down?
Sure. So first of all, just to remind you, the contract that BAM has historically had with BEP, in particular, the New York contract, it's an all-in price contract for all energy capacity and any other green attribute that we sell, whether that's an ancillary service or a REC that we might get. So it's an all-in price that BAM pays BEP and effectively then takes on the exposure from a market perspective. And I would say, today, generally, what we're seeing in the U.S. Northeast between energy RECs capacity and some other ancillary products that we sell, typically, like stabilization services, we're generating in the mid-50s. And so, I think what you'll see is as that contract steps down by the time it gets to its end of the step down, it will largely be in line with the current market price.
Your next question comes from the line of Ben Pham with BMO.
I wanted to dig into the multiple of 15 versus 20 that you highlighted on the Canadian Hydro sale. Is the 20x that's -- is that what you're getting today, and then the 15 is uplift on the pricing? Is that the difference between interest? Wasn't sure how much.
No. No, Ben. So just simply put, the assets we sold, 3 assets in Canada, are all contracted and have long-term PPAs attached to them. So simply just using the contract price and coming up with the EBITDA, using that contract price and looking at the enterprise value based on the sales price, the transaction was completed at north of 15x. So that's just the simple math. What I was trying to articulate though is that if you come -- if you then replace that contracted price with current merchant power prices, merchant energy capacity and ancillary, the implied EV to EBITDA multiple would be in excess of 20x, and that's relevant because when you see merchant Hydro trade today, it's generally trading at 20 to 20-plus times. And so it all kind of triangulates where the market is today. The market generally today is in that range where Hydro trade is at 20x on a merchant basis. And then obviously, if there are contracts in place, both contracts then drive a different trading multiple. But you can see that where our Hydros are trading is largely in line with the high end of the market, and I think that speaks to the fact that they are just high-quality assets, and in particular, they have storage capability. And that's really, really meaningful to buyers in the current market.
Okay. So the 20x is probably what you're seeing in the private market versus your stocks probably at 12 or so. And then the 15 is really -- they're actually 20.
Yes. And I think it's relevant because if you look at -- 80% of our asset base and cash flows are hydros, which do have this trading multiple. They get attached to them in the private markets and yet, the point we were trying to make in our written commentary is that today, investors tend to be overly focused on just the dividend and don't distinguish between balance sheet quality, asset quality and long-term earnings quality. And that's an important distinction, which would mean that if that continues, then for us, the private markets tend to be a really excellent way to surface value and continue to grow the business.
Okay. Thanks for clarifying that. And can you perhaps, it's just -- I know for me, it's been quite a while since the big '11 restructuring. So BAM buys about 30% of your power today. Not sure you have this at your fingertip, but can you high level, just walk through what those assets are right now? I mean, obviously, [ the kind of ] hydros in there. And then just talk about just maybe the contract duration that's left on all those buckets.
Sure. So the only contract that's left is the New York assets. Everything else has been pushed down with the contracts either eliminated or just completely harmonized to the third-party back-to-back agreement. So really from 2011, where we had PPAs between BEP and BAM for assets in Canada, assets in New York, assets that we had in Massachusetts -- or sorry, in New England more broadly, all of that has been eliminated with this restructuring. And really, we just have the singular contract now that's left between BEP and BAM in relation to its New York portfolio.
Okay. Great. And then lastly, can you also remind us how you guys are calculating long-term averages in that portfolio? Is it refreshing it every quarter you're doing every 5 years?
It's neither. It's typically done -- generally, it's done every year and it's largely driven around our financings. Because we borrow at the project level with the investment-grade debt, often the financing covenants and premiers require us to refresh our LTA estimates using a third-party independent engineer. So all of our LTA is vetted by IEs or independent engineers, and obviously the whole portfolio rotates over, and so most of the assets are looked at every year. And typically what the independent engineers are looking at is a 30- to 50-year history, and in some instances where the data exists, we're going back to 70 years. And I think the important thing is obviously, if you look at from when we started 20 years ago, we are about bang on LTA, if you look at through that history and in fact, even when you look at BEP from when BEP was formed in 2011, we're about bang on LTA. But naturally, we get it. When you're down, investors get nervous; and when you're up, people, sort of, exclude it from their analysis because it's seen as one-time. So we understand the questions, and we understand why people look at it, but what we get ourselves comfortable with is our own operating history over the last 20 years and then the independent engineer's assessments for every one of our assets in our portfolio which then supports the financings, which then validate our long-term averages.
All right. That's great to get, that data point, Sachin, on the historical trend.
Yes.
Your next question comes from the line of Rupert Merer with National Bank.
Can you talk a little about Brazil? We've had an election recently and of course, some changes in the exchange rate over the last six months. How do you see that market for investment today? Are there any asset sales coming out of privatizations that could be of interest to you?
Great question. I think, obviously, with Bolsonaro winning and the currency trading more positively in the last really couple of weeks, people's expectation that he would win. That's net, net, net positive to our existing assets in the marketplace and I think, generally, net positive for investment flows in the country. Look, our view is that he is going to stick to what he said during his campaigns, which is more privatizations, attracting more foreign direct investment. He does have a pro-business stance and obviously, we get it, he said some certain things that -- in the world today, you see more and more political leaders saying things of that nature. But we think in general, he will continue his pro-business mandate. He will be able to accomplish a lot of what he said because, obviously, having gone through the deep recession and the corruption scandal in Brazil, there's significant political will and will at the people level to move forward and drive economic growth as a key mandate for the success of that country, which we believe is where -- what he's positioning himself around. As far as asset sales go, I think you will see more asset sales in the country in particular, in the power sector as the country needs the capital. And I think the more important part for us in the power side is just that we think that competition in the power sector may be a little bit -- may continue to be muted and that might play to our strength. So we look at Brazil as a really positive market to invest in. We've been looking at investments over the last 4 years through all of this, but there's been a very, very strong bid in particular from Asian investors in the country. And we think as many of them take a pause to digest the things that they've bought, this may open a unique window for investors like ourselves, where we could secure good transactions. And obviously, we have a large development pipeline there that we continue to build out as well.
Okay. And then quickly on Ireland, you made a tuck-in there. That's a market we typically think of as having quite high valuations. Can you talk about how that asset made sense for you?
Sure. With Ireland, the real benefit we have is because we have such a large development pipeline and developers on the ground, often you get a small developer who needs capital very quickly and doesn't have the time to run an auction, doesn't have the time to run a process. And you know, we've seen this in North America over the years, too. That's when you get your greatest little tuck-in acquisition. It's not a huge amount of capital, but you can buy things that values that work from your return perspective that you would never otherwise be able to do, if they went to market. And it's simply because the relationships that we build along the way, and because people will understand that if you need speed and certainty of execution then, we just have a good track record in that regard. So I would say, this was simply a function of assets that the seller needed to monetize very quickly, and we were able to fill that hole.
Your next question comes from the line of Nelson Ng with RBC Capital Markets.
First of all, just a quick clarification on the Irish tuck-in. So was that done through TerraForm Power or directly through Brookfield Renewable?
It was done through Brookfield Renewable. It was sourced -- it was sourced in advance of us acquiring TerraForm and so, it just -- it was not part of the new framework that we have with TerraForm.
Okay. And then in terms of the, I guess, Brookfield Renewable's share of investment of $20 million compared to the FFO of $1 million, is that $1 million like net of assumed financing costs?
Yes. That's net of financing cost and that is our share. Will be about 40% of that project, and so the $1 million is our share net of financing.
Got it. Okay. And then just -- just on the Hydro asset sale, are all 3 of those assets in Ontario or is there something in Quebec as well?
Not. It's Ontario and BC. Nothing in Quebec.
Okay. And then in terms of the $650 million of proceeds, is that cash taxable in any way or do you have enough tax losses to offset any potential profit?
Yes. We would have substantial NOLs in the business. So this would be -- these proceeds would be after-tax proceeds because of our shelter that we have.
Okay. And then just last -- one last one. In terms of the wind and solar assets in South Africa, could you give some more color on timing? Are you expecting to divest this by the end of this year or could that drift into 2019?
We have a signed agreement we expect to close by the end of the year. Obviously, we need approvals that are out of our control, but it's all tracking well and we think we can get it completed by the end of the year.
Your next question comes from the line of Jeremy Rosenfield with Industrial Alliance.
Just a couple of clean-up questions. First on the asset sale, and I apologize if you covered it earlier. I'm trying to bridge from EBITDA to FFO. Was there any specific project-level debt within the Canadian Hydro portfolio?
Yes. Those assets are financed at investment grade and so the proceeds that we're talking about are all net of that debt and are effectively that share of the equity value.
Okay. And in terms of the reporting of the transfer of ownership, do you -- are you -- do you have to deconsolidate from a reporting perspective or do you retain sort of consolidation of the assets?
No. We will maintain operating control of those assets so we'll continue to consolidate them.
Okay. And then just to follow up on Rupert's question on Brazil. Can you remind us just from more of a strategic perspective, is there a maximum threshold or a maximum amount that you want to actually be invested in Brazil when thinking about portfolio diversification across different jurisdictions? I know, I think it's about 15% of FFO in Brazil right now but what's the sort of threshold that you'd be comfortable with? And how much more room do you think you have investing in that jurisdiction?
Yes. So I would say we generally think we'll invest 25% to 30% of our capital in markets that are outside of North America and Western Europe. And that is a basket of countries that includes Brazil, India, China and obviously, Colombia. And so we don't put a hard cap on any one country. But that being said, we think that as we've moved out into the world, into more countries outside of those regions, it just gives us more flexibility to move our capital amongst the emerging market regions, where we see the best value but the overall allocation to emerging markets hasn't changed. So generally, I'd say 25%-ish is a good overall target. We put that out at our Investor Day. And in that will be the various countries I just laid out as far as -- and Brazil being, obviously, an important one.
Your next question comes from the line of Frederic Bastien with Raymond James.
Back on the asset sales, you own many Hydro facilities in Canada. What made you decide to sell the Great Lake, Carmichael and Kokish facilities in particular?
Well, that's a great question, Frederic. I think today, those were very easy to sell in light of the fact that people didn't have to come up with the merchant view of power in the near term. And so we were trying to do something that was highly efficient, quick and something that we could broadly market. So it was just a very marketable portfolio in light of that certainty of cash flow coming in. And in a market where -- there is investor volatility today. It was something that we just felt had ease of execution. So there's nothing more to it than really that.
Okay. The other one for me. Can you speak to the other $0.5 billion of asset sales, on which you have yet to execute?
Yes. So we intend to -- the bulk of that is really around we intend to sell another 25% of the same portfolio to one of our funds, which we intend to do this quarter, in the fourth quarter, really off the back of this sale that we just made. So I would say, the vast majority of the remaining asset sales is that and then we have a few other smaller assets that we're selling, and that we're pretty advanced on but they would be small in the overall numbers.
And there are no further questions in the queue. I turn the call back over to the presenters.
Okay. Well, thank you, everyone. We appreciate the questions and the interest as always. We look forward to talking to you in February at our year-end conference call. Thank you.
This concludes today's conference call. You may now disconnect.