Cloudberry Clean Energy Annual report 2020

113 Cloudberry Annual report 2020 Financial statements Note 24 Provisions, guarantees and other contractual obligations Long term provisions The table shows the long-term provisions at 31 December NOK 1 000 2020 2019 PPA contract termination 4 641 - Resell obligation 9 920 - Asset retirement obligation 914 - Other 393 - Total long term provisions 15 868 - Due 1-3 years 14 561 - Due > 3 years 1 307 - The PPA contract termination is related to the PPA contract for the power production at Røyrmyra Windfarm. This contract was in 2019 agreed terminated from 2022 and a provision for termination fee is recognised in the purchase price allocation of CB Nordic Renewable and Infrastructure Fund I AS (now Cloudberry Production AS). See note 5 Business combinations. The provisions for “resell obligation” are related to obligations to prior owners of projects that will be realised. The provisions are based om estimates and are not interest bearing. The table below show the movements n long term provisions during 2020 NOK 1 000 PPA contract termination obligation Resell obligation Asset retirement obligation Otber Total Provisions at 1.1 - - - - - Provision made during the year - - - - - Additions of acquisitions 4 641 12 314 883 393 18 231 Provisions reversed during the year - -2 394 - - -2 394 Interest elements of provisions - - 31 - 31 Effects of movement in foreign exchange - - - - - Total provisions 31.12 4 641 9 920 914 393 15 868 Asset retirement obligation Provision for asset retirement costs is recognized when the Group has an obligation to dismantle and remove a hydro or wind power plant and to restore the site where it is located after a concession period is over. Because hydro power concessions do not have an expire date, no provision is made for hydro power plants, it is then assumed that the landowner will exercise the call option to acquire the asset when the landowner contract expires and if it is not prolonged. The provision for asset retirement obligation related to Røyrmyra Wind park was established after the acqui- sition of the CB Nordic Renewable and Infrastructure Fund I AS (now Cloudberry Production AS), and imple- mentation of IFRS in the consolidated group accounts. The estimated cost for retirement is based on expected cost at the expiry of the concession, this is based on an estimate of todays cost and adjusted for future inflation and discounted with the Groups estimated long- term borrowing cost. The expected settlement date is at the end of the concession period, end of 2040.