Grenergy Renovables, S.A. (5GR.F) Earnings Call Transcript & Summary

So okay, let's start. Good morning, and welcome to Grenergy's First Half 2025 Results Presentation. I am Ruben Gomez, Head of Investor Relations. The presentation is going to be led by David Ruiz, our Chairman and CEO; Daniel Lozano, our Chief of Strategy and Capital Markets Officer; and Rocio Fernandez, Head of Sustainability. They are going to take you through our business, financial and sustainability review. And at the end of the presentation, as it is usual, there will be a Q&A session for sell-side analysts. [Operator Instructions]. Okay. Please, David, the floor is yours.

Thank you very much, Ruben, and good morning, everyone. Let's start, as always, with the business highlights on page -- on Slide #3 with the main highlights of our first half 2025 results. Well, it's -- first of all, it's very important to remark that we keep turning, as we say here, rotation into value. And we are very glad to see that there is a lot of appetite for our hybrid assets in Oasis of Atacama, and we are bringing to the table big names like ContourGlobal, a KKR company, more recently, DIF, which is part of CVC. Early September, we announced the rotation of Gabriela. This is Phase 4 of Oasis of Atacama. As you know, we sold altogether is 272 megawatts of solar and 1.1 gigawatt hours of BESS to DIF and for an enterprise value, including earn-outs of close to USD 475 million. The multiple of the transaction was 1.8x invested capital and the asset will be delivered in the first half of 2026. And hopefully, we believe it will be operational in as early as Q1, and we will achieve COD in Q2 next year, right? The plant is performing well, the construction is performing really well, and we are very close to mechanical completion already. With this operation, we -- as you know, we would have sold Phases 1 to 4 of Oasis Atacama for an Enterprise Value close to $1.4 billion, which, as we have stated, it represents close to 33%, 34% of the total of the project size. Let me highlight once again that we are selling 100% interest in the projects. It's not a participation in all the projects. But if we consider the projects we have rotated, they account for just 33% of the total amount of megawatts in the project. And with this transaction, and that's one of our main KPIs, we have achieved 55% of the target of asset rotation proceeds. Remember, we were talking about EUR 800 million as we outlined in the Capital Markets Day 3 months ago. And it's a very important KPI for us. I would say that together with the -- our CapEx target is the most important -- those are the most important KPIs we keep in mind now. And it's very relevant for us that we are achieving more than 55% already 2.5 years ahead of the target. We also -- and this is a very important milestone. We recently announced 2 weeks ago, we closed the financing for 3.5 gigawatt hours of BESS. This is the largest BESS plan we've made so far in one single location and it's Phase 6 of Oasis of Atacama, what we call Elena. And we raised USD 270 million from a syndicate of 4 banks, right? We are -- as you know, we will explain to you later, but we are expecting this plant to be operational in the first quarter of next year, which is at least 2 quarters earlier than initially expected. We are -- and I think that's very important for us. As you know, we introduced Greenbox in our Capital Markets Day. We are advancing very well. It's maybe the most exciting project we have ahead, right? As you know, it's going to be divided in 6 countries. And it's our stand-alone division for Europe. And as you know, we are developing one of the biggest pipelines -- stand-alone pipelines in Europe currently with 32 gigawatt hours. And we are advancing. You will see many of these projects, as I will explain now in early stage, but that projects move faster than PV projects normally. So you will -- in the next update, you will see that some of these projects already moved to advanced development. And as you know, we have our flagship project in Spain, which is Oviedo with a capacity of 150 megawatts, and we are aiming to install 4 hours. So altogether will be 600-megawatt hours. And we expect to announce very soon tolling agreement. And also, we will announce which banks we are mandating for this project. Regarding our financial highlights, and Daniel will give you a lot more information, right? I think we've got a pretty good set of results. It's impacted very positively by the M&A deals of Oasis de Atacama in the first half of the year, revenues grew by 128% year-on-year. EBITDA reached EUR 86 million. And out of this, EUR 76 million came from the M&A deal. And net income reached EUR 35 million. Gross CapEx reached EUR 421 million. That's very, very important KPI for us. It's nearly 127% higher than the same period last year. We are close to EUR 0.5 billion in one semester, right? So that gives you the idea that we are really reaching the cruise speed we are really targeting, like minimum EUR 1 billion of new CapEx per year. If you remember, our target was EUR 3.5 billion for the next 3 years, including 2025. So I think we are nearly there. And I guess that we will accelerate in the second semester. Going to the net debt, it's EUR 815 million, in line with the increase of net CapEx in the quarter and well, just what we -- basically what we expected. The total leverage is 3.8x versus 6.6x in the same period last year, and the corporate leverage was down to 1.3x EBITDA. And lastly, there was a redemption of 2.44% of share capital after the last share buyback we executed during the first part of this year. And just to finish with this slide on ESG, I think Rocio will later explain in more detail. We are very proud to mention that we published our biodiversity policy. We achieved an A- in CDP 2024 supply engagement assessment, and we enter the IBEX ESG Index, which I think is great news. We are top ranked in our industry in most of -- the most relevant ESG ratings such as Standard & Poor's, MSCI and Sustainalytics, as you know. Moving to Slide #4, this is -- we display our platform overview for solar, hybrid and then in the next slide, stand-alone projects what we unveiled in the last Capital Markets Day. And before diving into details, I'd like to start by sharing some context. We have conducted a very in-depth review of our entire pipeline, and this has led to some adjustments. As you know, we really want to optimize our investment allocation. And I think it's very essential that we focus on these projects where we really believe we have high chances of success, right? And we have a high degree of confidence. We want to focus on developing projects which can achieve really ready to build in the next 2, 3 years with good returns and real opportunities for securing PPAs, right? And in parallel, we are relocating some resources, moving some development resources from purely solar PV to more hybrid and stand-alone storage projects where we are definitely making higher returns at the moment, right? In September 2025, our platform is 12.5 gigawatts of solar and 72 gigawatt hours of BESS. I think that's a very important figure, which -- of which 35 gigawatt hours relate to hybrid projects and 40 gigawatt hours for stand-alone. Let me remark that's a very impressive pipeline for BESS in total of more than 70 gigawatts. On the right-hand side of the slide, you can see our three main geographies. You can see LatAm, where Chile is a very high percentage, is the one that needs the power of solar and hybrid plants. And Europe is living the stand-alone with our Greenbox platform. Moving on Slide #5, we -- I don't want to stop here very long. We are very transparent. We update the details by geography and by country. And as you can see here, we keep advancing in our hybrid projects in Chile with Oasis of Atacama and Central Oasis and in Spain with Escuderos. We really keep being very optimistic on Chile. We see very strong appetite for offtakers to contract energy and well, I think there's room for further development and there are fantastic M&A opportunities as we showed with the project we purchased from Repsol and Ibereólica last year. And well, the market seems really, really good. I believe that Chile is starting a very, very good cycle with strong investment in new mining projects and a very promising data center industry booming in the country, and they need plenty of energy, right? So we see that the growth in energy consumption in the country is very, very promising. Moving to Slide #6, just very quick update. Well, this is the pipeline I was announcing. You can see the 600 gigawatt hour, right that we launched to Oviedo project. And then we have the rest close to 40 gigawatts and it's -- they are advancing in the 6 geographies in Europe, mainly where we are, right? And as I anticipated, I think when we update the pipeline in November, you will see that some of these projects are already moved to advanced development. And I think we're a very consistent business plan between 2026 and 2028 in stand-alone in our Greenbox platform. On Slide #7, we would like to show the main data and planning of the total Oasis Atacama. As you know, it's a total capacity of 2,000 megawatts, 2 gigawatts and 11 gigawatt hours. Remember, when we first announced this project in the first Capital Markets Day we made 2 years ago, nearly 2 years ago, it had initially a capacity of just 1 gigawatt and 4 gigawatt hours. And currently, the platform doubled the size of 2 gigawatts of solar and triple the size of storage to close to 11 gigawatt hours. And well, we are performing and executing very well. As you know, we have rotated Phases 1 to 4 of the project. And Quillagua 1 and 2, the first 2 phases are connected in operation and both platforms are performing very well. And Victor Jara is really well on track. All the batteries are already installed, and we expect the interconnection very, very soon and COD before the end of the year. And Gabriela is advancing also above expectations that all the batteries in this case from CATL are already at the site, and we expect the connection in the first quarter of 2026. We're very happy. We are executing and arriving and reaching COD of this very large assets above initial expectations, right? If you compare to PMGDs, the type of projects that we were mainly doing before, we are executing earlier. Everything is on as. The problem we had before with the small distribution assets is that we have to rely on distribution companies for interconnection. But in case of large projects, everything is on as. So we are performing really well. We are delivering ahead of estimated dates at least in the first 4 phases. Regarding Elena, Phase 6, we will deploy it in 2 stages, right? It's a plant that had an interconnection already built and substation interconnection line. There were 77 megawatts of solar already in operation. And we are performing initially the capacity for batteries for 3 gigawatt hours in order to improve the time to market. And that's, I think, very important, and that's why we have signed this financing for USD 270 million. It's -- let's call it, this bridge to PPA. We have like a 3-year financing. We are working very intensively on the PPAs. The moment we sign the final PPAs, I think during this year, we will approach the refinance of this project, and we will build the pending PV part, right? So that's the plan. And I think it's the right strategy for this large asset. Phase #5, Algarrobal, we are advancing on the PPAs. I think we might announce them very soon. We believe it will be a basket of 2, 3 PPAs -- and well, I think before -- definitely before the end of the year, we will announce the PPAs for this plant, and we will -- we are mandating the project finance. So only Phase 7 will remain, not mandated at the end of this year. Moving to -- well, Slide #8, we saw main achievements. I think you're very familiar with most of them. So I don't want to spend a lot of time. But again, as I mentioned, Quillagua 1 and 2 are connected. They're selling energy at nice. We sold Gabriela, we closed the financing for Phase 6. We are advancing of PPAs for Phases 5 and 6. We are very soon mandating financing for Phase 6. So everything is running pretty well. Slide #9, we are very proud of this. We raised already we consider Elena. We have already raised $1.2 billion in project financing with 12 top international banks. I think the big names are there. The latest news with incorporation of -- in the syndicate of more banks for Gabriela for Phase 4. We -- those include the Rabobank, ICO, Bank of America, BBVA, JPMorgan, KFW. So I think we're very proud of what we are achieving and we are bringing most international banks active in project finance are already in Oasis Atacama. And there is a very high interest from most of these lenders to work with Grenergy in new projects. So I think it's very good news. Slide #10, well, we included, I think, was relevant is a new slide, and we include more details of the asset rotations we have accomplished for Phases 1 to 4, bringing an enterprise value of $1.4 billion. And altogether, they implied 723 megawatts of solar and 3.6 gigawatt hours of BESS, right? The latest sale implied a ratio of 1.8x Enterprise Value with invested capital and Quillagua, we achieved 1.5x, Victor Jara 1.7x. This is way higher than our guidance of 1.3x we gave at the Capital Markets Day, which we believe it was conservative. It was good, but it was conservative. So we are proving that we are getting way higher ratios. Just a quick review on Central Oasis. It's like a new -- well, it's not new, but it's the platform we outlined in the Capital Markets Day. The size is similar to the size that had initially Oasis of Atacama at the beginning. We are looking at M&A opportunities to make it even bigger. It's really -- there is a very high demand of energy in Central Chile, and we believe it has to be approached with projects in the center, right? So what we show here the main data and most of the platform is already contracted. And I think the next mandate after Elena is already ongoing and it's Gran Teno, Tamango where we are hybidating this plant plus Planchon, which is next to plant to Gran Teno. And the next mandate right after will be Algarrobal in Oasis of Atacama and Monte Águila Phase 4 here, right? So it's an ongoing process, as you can see. And again, we are raising -- there's a lot of appetite from lenders, and these projects are already contracted. So it's going very well. Just wrapping up, well, again, we show I don't stop here a lot, but we've covered all the points, but the main achievements of Oasis of Atacama. On the next slide and to conclude, just we display our first flagship Greenbox project in Oviedo. It's a region in the north of Spain for all those that are not familiar, and it has a capacity of 150 megawatts and 600 megawatt hour. It will be, we believe, the first large stand-alone project in Spain. And again, we are expecting to announce the tolling agreement very soon, and we are about to mandate with a syndicate of banks. There is a very high interest in financing this first large project in Spain. So I think we will be once again pioneers and signing a tolling agreement for stand-alone batteries in a country like Spain. And regarding construction, we are expecting to start construction as early as Q1 next year. We are already securing some of the main components and Trafos is something we do very often that before the official NTP, we already secured some of the longest delivery materials, right? So thank you very much. I turn the call to Daniel for the financial review. Thank you.

Thank you, David. Now let's take a look at the company's operational performance for H1 2025. The decrease in total installed capacity was 4% from 950 megawatts to 914 megawatts explained by the assets that were rotated in Chile, okay? Then regarding production, we experienced a 36% increase in total output. This increase was mainly driven by Gran Teno, Elena, 77 megawatts and to a lesser extent to PMGDs and Tamango. Contracted volumes increased by 62% and represented 87% of our total electricity production. So we have a conservative business model approach by closing PPAs for most of our production. Realized prices decreased slightly to EUR 44 per megawatt hour from EUR 45 megawatt hour impacted a little bit by ForEx dollar-euro difference. And on the right-hand side, you can see the summary of the key financial KPIs, which we will review in the next slides. So moving to Slide 15. Total revenue in the first half of 2025 amounted to EUR 438 million, representing an impressive increase of 128% year-on-year. This growth was largely fueled by the successful M&A transaction through asset rotation in LatAm, as you know, which significantly contributed to a plus 149% growth in Development and Construction division. Regarding energy revenue grew plus 33%, mainly driven by Chilean asset. GR Power division showed an increase of 103% organic growth and then a small decrease in Service division of 8%. The EBITDA for first half 2025 was EUR 86 million, reflecting an impressive growth of 176%, demonstrating our ability to successfully rotate assets while we keep growing our portfolio. Then moving on to Slide 16, CapEx. As David said, this is impressive. Last year, we had EUR 186 million in the first semester. That was almost the same amount we did in 2023. And in this first half of the year, we are reaching EUR 421 million, that is more than double and mainly driven by the construction of hybrid project in Chile, proving that the execution is well on track to achieve the business plan we presented in May. As you can see in the chart, almost half of the amount invested belong to Oasis of Atacama, first 3 phases already sold and then another EUR 155 million in hybrid project in LatAm. The remaining CapEx is invested mainly in Spain, in the project we are building and additional EUR 18 million was dedicated to development initiative in our 3 main geographies. Then in Slide 17, cash flow. Well, as of June 2025, our cash position reached EUR 283 million. So we have a solid cash balance position, while we are increasing the CapEx doubling it compared with last year. So CapEx, as you can see, has been the main outflow, EUR 421 million. However, there was some CapEx that we are investing that has been previously agreed to be sold for Phase 1, 2, 3 of Oasis of Atacama. Then we have more financial debt, mainly project financing coming from the deals we are successfully closing and some corporate minor impact in ForEx impact of EUR 42 million. So with the current cash position together with expected project finance that should come M&A deals already signed such as Tabernas, Jose Cabrera should come in coming months and the sale of Gabriela, well, we have enough cash to keep self-funding our business plan. Then finally, in Slide 18, total leverage, okay? Well, net debt stood at EUR 815 million. As a result, reported leverage ratio of net debt to EBITDA remained at a level of 3.8x and corporate leverage at just 1.3x. However, considering the deal we have already agreed and pending to have an impact in the cash flow. On pro forma basis, this ratio will drop to 0.2x and corporate even positive to minus 0.3x. So this shows how quickly we can reduce this ratio after good asset rotation we are doing, while we are increasing our pipeline, more opportunities, more projects to come and providing good news every time. Okay. So that's all from my side. Rocio is going to explain the main messages about ESG.

Thank you, Daniel. Good morning, everyone. I invite you all to follow the details of the progress in sustainability matters during the first semester of 2025. We are immersed in the second phase of the ESG road map '24-'26, and I am pleased to announce the goals that we have successfully accomplished so far. Regarding both climate change and environmental dimensions, the climate change and biodiversity policies were elaborated and approved by the Board of Directors, consisting of holistic framework where objectives, key principles as well as implementation and monitoring mechanism were established. Regarding the governance dimension, the annual sustainability report according to TCRT was published earlier this year. Apart from that, I would like to mention an important milestone achieved. A corporate sustainability social management plan was approved by the Management Board, establishing the guidelines to be followed when any voluntary social or environmental initiative is implementing with the communities near our projects. In this context, we are proud to mention that during this year, we invest approximately EUR 200,000 so far in vulnerable communities in Chile. Now moving on to the next slide. Regarding our position in ESG ratings, I would like to emphasize the fact that Grenergy consolidated once again its leadership position in the most prestigious ESG ratings. During the second quarter of 2025, some scores were updated, providing us with better results than our peers and also on our serves last year, which is the case of Sustainalytics that keeps on considering us in its low-risk area and also S&P that after having improved score this year, recognized us as the top 16% global in the electric utility sector, above sector average. Moreover, it's also highly remarkable that this year, we were recently listed in the IBEX ESG Index. Additionally, Grenergy got an A- score in CDP 2024 Supplier Engagement Assessment. Last but not least, just mention that some other ratings such as EthiFinance, CDP Climate and MSCI have not been updated yet. So we will give you further information about them along this year. So that's all from my side. Thank you very much all for your attention.

Okay. Thank you very much Rocio. Now we are moving to the Q&A session. [Operator Instructions] First question from Alexandre Roncier, Bank of America.

Thanks for the question. I think what I'm perhaps a little bit puzzled this morning and some of the conversation with investors regarding the stock reaction is ultimately some expectations perhaps that we would have some announcement regarding tolling agreements today. And I know you guys have been obviously working very hard to accelerate the pipeline, move things into advanced development, but everyone is kind of waiting for those to happen. So I think any color on progress there. I think in some of the mention that you made regarding the pool of PPAs for some of the other hybrid projects before year-end in the market before year-end is a long time actually, but I know you guys are working really hard. So any color on that end regarding tolling agreements, if you think any kind of new structure could be struck, if you're already thinking about geographies beyond Spain on stand-alone would be super interesting.

Thank you, Alexandre. Yes, I was looking at the screen. And yes, somebody maybe might be was expecting a big announcement or -- but I don't know, I think we are really on track. And for us, once again, it's extremely important to be on track to what we promised concerning CapEx figures, execution, right, and asset rotation, right? That's mostly linked to Oasis of Atacama. Let's not forget that -- and correct me if I'm wrong, Daniel, but I think out of the EUR 3.5 billion, more than 60% or even 70% would be coming from the large Chilean platforms. So we are really, really focused executing there, right, and rotating the assets. And I think this is being great news, and we have made these very important announcements in the last few weeks. And believe me, we will make announcements concerning tolling agreements. We are working very hard, and we have several options, but some of them are very advanced. Unfortunately, sometimes when you have on the other side of the table, large utilities or large corporates, they are not -- they cannot move as fast as we can move. And we only make announcements when we have something really binding. Even if we have a term sheet signed, we don't feel that that's fully binding, we don't announce that to the market. Asking me about other geographies, I think we have already stated that together with Spain, Germany will be the next market. And we also have been working for a very long time in negotiations for large tolling agreements. I think before the end of the year, at least one of these announcements will be made in Germany. It could be like a large framework where we could later allocate projects. And we will make the announcement for Oviedo, for Asturias and also for the first hybrid project in Spain, which will be Escuderos plant and as we have explained, we have several possibilities there because we are talking to the current staker, which is Galp. They have 7 years remaining of PPA. So -- and they're interested, they might be interested in converting that, extending that and converting to a hybrid PPA or we could close and tolling that will coexist with the current PPA, financial PPA for solar. So that's all we're working very hard. I'm sure that in our next presentation in November, we will -- there will be -- we will announce something. If not, for sure, before the end of the year.

The next question from Fernando Garcia, RBC.

So I noticed that you are separating Atacama Phase 6 Elena project with the batteries part expected to start 1 quarter earlier and the remaining solar delayed 3 quarters for an asset that you are still in advanced negotiation for the PPA. So it looks like that you are going to operate this asset in probably quasi stand-alone battery for around 1 year. So I wanted to check here what is the strategy that you have for this asset specifically. And David, let me ask you on your asset rotation strategy. After the agreement to sell Elena, as you say well, you are exceeding your asset rotation targets -- so I guess you have here two main options or higher gains and have lower debt at the end of the plan or use these proceeds and invest more. So I wanted to check here. And I know that it's just 4 months since the CMD, but I would like to check here what -- and listen your thoughts about it?

Okay. Thank you, Fernando. It's true that, okay, in Elena, we could have done to different strategies. We could have waited until the PPA -- it's a very large project, right? Let's keep in mind, it's Elena alone, and Elena alone, it's more than 2x bigger than any of the previous projects like Gabriela. So it's like putting together Quillagua 1, Victor Jara and slightly more, right? So we're talking about big project. It will not be a single PPA. I mean there will be a large anchor PPA. That's the way we're approaching that we have been negotiating for very long with a big name. But it will be a basket of several PPAs and also retail unit will buy part of the energy. So it's a more complex deal, right, but it will take a few months. And okay, so we spoke to the banks and we say, okay, well, there is the opportunity of executing a fast track with the best because there is a great opportunity if we connect the best earlier, we have like a year of upside having the plan connected and benefiting from high prices at night, right? And they offer us this product like, okay, let's close a project finance, which instead of a mini perm that normally is 5 years. In this case, it's been 3 years. And well, we have a lower leverage level, but still we have borrowed more than USD 250 million, which is what we basically needed. And then we have 3 years we are not going to need 3 years, but to bring in the PPAs and refinance. And at that time, we will build the PV plant. Currently, the prices are very low during the day or even there is curtailment at north of Chile. But with the introduction of many more batteries, we are expecting those prices to go up also during the day. So I think eventually, it's wise to have your generation -- your factory of energy next to your battery as early as 2027. So in the long term, in countries like Chile, we definitely prefer hybrid PV BESS instead of being just stand-alone. So that's kind of the strategy for Elena. And I think we can start getting revenues as early as February next year. I mean the sooner the better, right? There's a big incentive. It's -- only this plant by itself will be close to $100 million EBITDA. Just Elena once it's operational PV BESS. So the sooner it gets connected, every month really counts. About your question, well, after the rotation of Gabriela, it's true that we are getting really on track on the target of rotations, right? Let's see. Yes, there are more projects -- there are more rotations to be announced, not as big as Gabriela, but it's true that we might reach this target earlier than expected. And well, next year, eventually, if it's not in February, it will be May, we will give visibility on our targets for 2028, right, as we do every year. So if we have met this financial target of rotation before, there is a possibility that if we see the right opportunities, we accelerate CapEx. And -- but as long as we believe that the other alternative is what you say, okay, we reduce debt and we take a more conservative approach, and we keep investing what we said we were investing. But it will depend a lot on how quick we can execute in Greenbox. Let's not remember that the figures for Greenbox are very demanding in CapEx. And for us, it will be very interesting to diversify in other European markets.

Okay. Next question from Anna Webb, UBS.

I've got a question on the overall pipeline. I think there was a kind of smallish reduction in the -- particularly in the stand-alone BESS pipeline. I'm just wondering kind of what the key drivers there? I mean, I know you said that you're keen to take a kind of conservative approach and only have projects in the pipeline you think have a realistic -- real good chance of being realized. But what are the kind of specific challenges you're seeing with some of the projects you're taking out or not challenges, but where do you see -- what makes you think those projects are less likely? Is it grid connections, the market outlook prices? What is it that's driving those projects coming out of the pipeline?

Thank you, Anna. It's a very good question indeed. It's because I think the profile of the company is changing a little bit, right, because we were -- only a few years ago, we were targeting 90% on our own staff, our projects developed greenfield from scratch by us. And I think now that we've moved a lot to the best space and in particular, stand-alone space, time to market is everything, right? So we want to make sure we have the right staff, but even more important at the right time. And that's something that we want to be -- so whatever we develop, we will love to be sure that is really going to make it, but it's really going to make it at the right time because if -- in PV, I believe we could wait 4, 5, 6 years, some plants we building in Spain took us more than 6 years to develop, like Ayora plant has been 7 years. I don't think we like that with BESS. So the opportunity is huge and it's great, but the next 3, 4 years, we have visibility in the next 3, 4 years. So what we are doing is we are recycling some of the projects that we don't foresee that will happen. And our buy side, our M&A team is working very hard also to find opportunities to increase. Just an example, our flagship project, Asturias, Oviedo it is 150, 100 was developed by us and the 50 extra that was in neighbor that had this 50. We put it together with 100, and we made 150. We're doing something similar now for our first large project in Germany. So there will be a lot of buy-side component in our pipeline coming ahead. So -- and that's been the case also in Chile. Some of the large -- our largest project now Elena, as you know, was initially developed and built as a purely PV project by Repsol and Ibereólica. So it's just the -- don't think that we will be executing is just coming from what we have in our pipeline. Some projects will come from external sources as well.

Okay. Next question from Beatrice, Mediobanca.

I wanted to have an update on Central Oasis platform. You discussed about the PPAs that you have more or less negotiated all over there. But I wanted to understand a bit more about the realization of the platform. How is that proceeding and the timing about that?

Thank you, Beatrice. Let me jump to yes, Central Oasis. It's -- I think it's quite simple to explain. Well we have -- Central Oasis was born like is already with the first Phases 1 and 2 were to projects that are operational, Gran Teno, Tamango as purely PV projects, right? They were financed well, slightly more than 2 years ago by BNP and SocGen, the French banks. And like everywhere else, we believe there's a business case for hybridization. So that's the first mandate. And we have already mandated, right? We normally don't give when we mandate, we don't really make it public only when we close the financing. But I think after Elena, the next large financing we are working in will be the hybridization of Gran Teno, Tamango and Planchon. Planchon is a new plant, but it's next door to Gran Teno. So altogether, these 3 are under a single mandate. And I think it should be -- should get closed in Q4 before the year-end, right? And then Phase 4 will be following, and it's very, very similar. It's further south. It's quite a large plant. But in fact, we are starting construction very, very soon. We have already ordered Traffos. And it will have a similar PPA structure, right? Phases 1 to 4 will -- they have PPAs that we signed some time ago, right, with a large utility. So let's say that around 40% -- between 30% and 40% of revenues are coming from those PPAs, investment grade, just solar. Then we have capacity payments, which is like 25% approach here if we are considering 4 or 5 hours for BESS. And then all the night energy will be purchased by our retail unit, which is GR Power and mostly to serve the energy we need for Codelco and other large PPAs we have. So that's approach. And Monte Aguila, I don't want to call it a copy paste, but it's very, very similar approach to Phases 1 and 3. We are mandating -- we have already mandated Phases 1 and 3. That's the first closing Q4 and Monte Aguila will follow. We are expecting financial close in Q1. But it doesn't mean we don't start some works of construction. [indiscernible] is more end of 2026, 2027 project, and we are working several offtake opportunities. There are many process now in Chile with mining. There are very important opportunities with data center. We are approaching through our retail unit. I think there are a lot of opportunities in -- for offtake opportunities in Chile, especially in Central Chile. I would expect that if we find the right projects and we are analyzing some projects this platform might grow slightly further. But that's something that we will inform as soon as we have something in hand.

Next question from Henry Tarr, Berenberg.

I had a couple. So one was just can you talk a little bit more about the economics of the Greenbox BESS projects that you're looking at and how that would break down? And then sort of what do you see as the main risk for you looking at these sort of tolling agreements? I guess, is it just the physical usage of the batteries? Or are there other risks that we should be thinking about? And then just sticking on sort of pricing, I guess, looking at the sort of PPA pricing and environment, obviously, you're going through the discussions now with further phases about Atacama, et cetera. How is the appetite and how are the sort of pricing and returns that you're seeing on those projects as we sit here today?

Thank you. I think I will reply Oasis of Atacama, and I might leave Daniel to reply on the economics of Greenbox, right? Because I think you're very familiar. And I have to say every tolling agreement is different, and the revenue stacks from one market to another is slightly different, right? So we might take a different approach, let's say, in Germany from what we might take it in Spain or definitely the U.K. So -- but anyway, there are many things in common. I'm sure Daniel can give you more visibility. And about Chile, again, I'm pretty optimistic. It's -- well, we don't expect similar IRRs in Central Oasis compared to Oasis of Atacama, mainly because the yield of the northern plant is close to 3,000 hours. So it means you have a perfect cycling. We managed to get some PPAs at the right time. And then CapEx went down quite a lot. I think the CapEx, and we might talk in other questions about -- we feel that the CapEx for BESS is currently have kind of reached some bottom at the moment, right? We are not expecting to go up, but we are not expecting to go further down, at least now in the next couple of months. And I think the CapEx for solar is going slightly higher, 10%, 15% up, yes. So putting these two things together, we still are getting definitely double-digit returns and in Central Oasis projects, right? But in the new PPAs in the north, even if the PPA prices will not be in mid-80s like they were at the beginning, even if they're in the high 60s, low 70s, CapEx has gone down quite a lot. So we are pretty happy with the returns, right, we will be getting. And I leave you, Daniel, with the economics of Greenbox and just some visibility on the economics.

Okay. Thank you, David. I mean, Henry, the revenue stream for stand-alone business model depends on every single market regulated revenue, ancillary services, capacity payment and the spread day and night. But the reality is that for us, and we try to make it simple and especially banks are requesting us to make it simple to have it financed. We -- as you know, we are going to try to sign tolling agreements for 8 to 10 years. And remember, be in mind that for Oasis Atacama, Central Oasis, as we are doing just 1 cycle per day charging the charging, lifetime of the asset might be 25 years. But if you are doing 1.5 cycles, 2 cycles, if you're doing 2 cycle lifetime will be half of it, so 12 years. So if you are closing in Germany, tolling agreement of, let's say, 8 to 10 years. And starting first year, normally, we like to have it mentioned. So starting 1 year after the mission period while you are connecting in order to avoid any production risk. That means that you are going to have a fixed payment during 90% or even more percent of the lifetime of the battery. And it's going to be really easy to modelize it. We are guiding to more than 12% project IRR in Spain, even capacity payments are not regulated, that is an upside. However, whenever we close the tolling agreement, hopefully, going to be soon, before the year-end, we are going to let you know the way to modelize it. But remember, it's a fixed payment. They are operating the battery. We are selling not energy. We are selling the service of that battery to our customer that might be an [indiscernible] trading company.

Okay. Next question from Flora Caixa Bank.

On the CapEx you've just mentioned, I was just wondering if you have any negotiations post the summer increase in lithium. So the CapEx in BESS, you mentioned that we're probably at a bottom. Can you just explain us how do you see this evolving considering this volatility in lithium prices? And then just to manage expectations, to be clear, do you expect to announce anything on tolling agreements in November release? And secondly, do you have any range of potential level of the tolling agreements? Because I think there have been some discussions, we do mention some numbers that I'm not sure are within the investor base. So just to manage expectations when this result?.

Thank you, Flora. I think about the -- I'm not sure if we have made an update on -- well, in this presentation. But it's -- lithium prices, they do have obviously an impact on the price of battery packs, right? But that's not -- I think that's not higher than 15%. So it's -- even if the price of lithium skyrockets that I don't think it will happen, right? We have seen some increases. I think even the Chinese government directly or through CATL or other players, they were shutting down temporarily some mining activity, right? That's not by chance. I mean they're looking at increasing the price of lithium because it was so depressed. And it's happening, but even if the lithium goes up by 10%, 20%, 30%, the impact is quite limited on the price of battery packs, let's say, between 5% and 10%. There are other factors. It's basically supply and demand that could move the price of batteries higher. And I think EV, electric vehicles are -- demand is surging, and that's a factor finally and mainly in Europe and China, other regions, not as quick as they were expected. But we see a lot of oversupply or overcapacity in many factories in China. And also the gains in productivity are quite impressive. Only I think the day before yesterday, BYD announced their new product there will be a battery of altogether 14-megawatt hours that putting 2 containers together. I think CATL is more betting on the two layers that it will be a product of 12-megawatt hour. Remember, the first batteries only 1.5 years ago were batteries of 6 megawatt hours. So it's -- everything is happening very fast, and they're putting more capacity in the same space, and that drives the price down as well. So I see this -- we have seen a sharp decrease in price. I believe the prices will be stable or even could go slightly further up. But I think we will see a further decline. I think it's a similar story to what we lived what we lived in PV, right? It's a bumpy road. It's been going down, but it's been going up, down again. And look, at the same panels, we were paying $3, now we're paying $0.08, right, only 15 years later. So I think it's a similar story and about the tolling agreements, Flora, we are working -- we were -- the sooner we have a binding agreement and we are, I think, quite close, we will announce. And I think the first one will be definitely Elena, and we are advancing very well in one of -- we have 3 large negotiations in Germany. I think also we might expect that at least one of these will be announced before the end of the year, right? So we will definitely give some visibility, and we'll try to make an effort to explain you guys how the economics works. And again, every tolling will be slightly different geography by geography and project by project, and we will really make an effort to explain you.

Next question from JB Capital, Ignacio.

I have two questions. The first one is on the tolling agreements in Spain. Daniel was mentioning that capacity payments in Innovia would be on top of that 12% project IRR, which I would assume it would be quite a significant upside. I don't know if you could quantify this. And then if you can give us some color on any regulatory developments that we -- or that you are expecting in Spain in order for this technology to take off, okay? And the second question is just related with the evolution of power prices in Chile. We saw a decline in the second quarter, I believe, mostly related with the PMGDs. So if you can also give us some color on what's the latest situation there? And maybe how are we heading into the second half of the year, okay?

Thank you, Ignacio. Sorry, your second question about Chile, were you asking about PMGDs in particular or?

No, the prices, maybe. If you want, I can jump on it. There has been an effect on Chilean prices, both because, first of all, we have a more diversified solar PV metrics, portfolio, that means that PMGDs that in the past were more important. Now it's not as important as it was before. And you know that PMGD, they have a very pretty high price of around $65, $70. So on average now with more projects selling energy at full price or PPA, that means lower on average price in Chile, okay? And then...

And I guess the FX, yes, Daniel?

Exactly. So -- and then we have agreements in dollar, our accountancy is in euro. Our investments are in dollars, but the currency we have is euro. So there has been an impact of ForEx exchange.

Okay. And about the tolling again agreements, the capacity market. Yes, some -- I think some of the large utilities, in particular, are saying that there's no regulation in Spain for BESS and they're waiting on capacity payments. But I don't think that's a good way of approaching my opinion -- the guidance we've given on IRR is completely excluding any capacity payments. I think finally, we will see that mechanism published in the next few weeks, at least, I don't know, I think our regulation team is telling me every time I find regulation manager is telling me, okay, next week, next week. But finally, it seems that we are nearly there, and there will be an auction at the end of the year, we believe. But don't expect very great upside coming from capacity market. That's our expectation, right? It will be lower than many people think. So for us, it might be like 10%, maximum 15% upside, right? And that's similar to what we are going to see in other markets, like Italy and Poland and nothing to do with the auctions 2 years ago and 1.5 years ago for storage where most of the revenues were coming from capacity payments. But now it's going to be a lot more contenders. And I think the auction that the prices offer will be way lower. So we believe that capacity should account for 10%, 15%. In Chile, in some cases, it's in the north, it's 15%. And it's an automatic mechanism, but it's 15% north, 20% maximum in centralizes. So this is the way we see it.

Okay. Thank you very much. There are no more questions. So thank you very much for attending and see you in a couple of months in our Q3 results presentation. Thank you very much.

Thank you. Have a great week. Bye.

Bye.