Cloudberry Annual report 2021 Financial statements 136 Included in the carrying amount is capitalized external cost related to the project, salary to employees working with project development and borrowing costs. Capitalised costs in 2021 consist of NOK 1.5m (NOK 1.7m) in borrowing costs, NOK 2.6m (NOK 2.0m) in salaries and NOK 6.6m (NOK 4.8m) in external fees. The capitalisation rate applied for borrowing costs is 3.2%. Power plants under development (Development projects) Expenses related to research activities (project opportunities) are recognised in the statement of profit or loss as they incur. Expenses related to development activities (backlog) are capitalised to the extent that the project qualifies for asset recognition, the Group is technically and commercially viable and has sufficient resources to complete the development work. For Cloudberry asset recognition of project inventory is done when Cloudberry has the right to explore the developing project and is in the process to enter a concession application. Before asset recognition, the projects are assessed if it meets the major key success prerequisites and it must also meet the criteria for expected future economic benefits, either from a project sale or from an in-house owned power producing power plant. The development projects are part of the Develop business segment and are mainly held for trading. A project can be reclassified to held for own use if it is selected to be kept as a long-term producing asset. When a project is ready to build, and Cloudberry makes the final investment decision (FID), the projects will be reclassified to property, plant and equipment and accounted according to IAS 16. Impairment For inventory impairment is preformed if net sales value is less than the carrying value of the asset. Cloudberry has implemented a quarterly routine to go through all projects to secure satisfying progress and attention. If a project does not qualify for internally prioritization, but the projects is put on hold or discontinued, the book value is impairment tested and a sales value is assessed. If the sales value, less cost of disposal is less than book value, an impairment loss classified as a write down is recognized over the profit or loss statement. As per 31 December Cloudberry has an impairments loss of NOK 3m related to some minor hydro development projects due to lack of inhouse further development and the prospects of profitability in the projects. The impairment loss is classified as cost of goods sold. Projects with construction permit Stenkalles (project Vänern) Detailed planning and procurement is underway for Stenkalles wind farm, which is located in Sweden’s largest lake, Vänern. Cloudberry’s new off-shore team is working closely with the project team from the Dutch company, Ventolines to optimize the project and further reduce risk. Final investment decision is expected during H2 2022. Ventolines recently completed a very comparable 383 MW shallow-water project in Lake Fryslan, the Netherlands (https://www. windparkfryslan.nl). Project backlog & pipeline Björnetjernsberget Cloudberry has sent a consultation document (Samrådshandling) for the Björnetjärnsberget project in Eda municipality, Sweden. This means that the formal process related to the project to the authorities and stakeholders has begun. The project is within municipal plans for wind power. The project is planned with 15-18 wind turbines with a total installed capacity of 90-140 MW. A collaboration has also been initiated with Hilmer Andersson AB, a local sawmill that over several years has had major challenges with poor power supply, both security of supply and capacity. See also: https://www.cloudberry.no/sv/project/ bjornetjarnsberget-vindpark
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