Hydroelectric San Jose de Minas S.A. “San Jose de Minas”, is Polaris Renewable Energy Inc.’s newest subsidiary recently acquired in September 2022. San Jose de Minas is an operating run-of-the-river hydro project with a capacity of 6 MWs, located along the Cubi River in San Jose de Minas, Ecuador.

San Jose de Minas has 7 years remaining on a 15-year power purchase agreement with a wholly-owned Ecuadorian government entity, for the sale of all power production.

HSJM has one expansion opportunity consisting of the introduction of a conduction channel from the adjacent Perlabi river that would increase the load factor of the existing plant from approximately 65% to approximately 85%. Such expansion does not require any amendments to the current PPA. The Company began construction of the Perlabi project in April 2023, with a budget of $4.0 million, and expected completion in the second quarter of 2024.

In addition, the project has the capacity to add a turbine which would enable increased production during the rainy season. With the additional turbine the Hydro Project would be expected to increase its power capacity to 10 MWs. Such an expansion would require an amendment to the current PPA or a separate PPA.