Grenergy Renovables, S.A. (GRE) Earnings Call Transcript & Summary

Good morning, and welcome to our 9 months results presentation. I am Daniel Lozano, Chief Strategy and Capital Markets Officer. Here, I have with me David Ruiz de Andrés, that's Grenergy CEO and Chairman; and Maria Rodriguez Gismero, our Sustainability Director. Well, as always, at the end of the presentation, there will be a Q&A session. Now I'll hand you over to David.

Okay. Thank you, Daniel. I guess you can hear me right, and good morning, everyone. Thanks, once again, for being here with us today. And as Daniel explained, we will start today talking about our strategy and giving you important updates as we do every year in this quarter. It's really an exciting time to be working in the renewable sector. It's experiencing exponential growth in all aspects of the industry, not just in [indiscernible] areas, such as PV or wind, but also in emerging technologies like storage. We are living in unprecedented moment in history. I think climate change is unfortunately accelerating, and the geopolitical situation is new powerful driver as well. So this is causing acceleration of energy transition and what we are -- I think we are very lucky to be in this sector at this moment. Moving to Slide 4, and we would like to give like a quick overview of the industry. Now Europe is willing to jump from less than 200 gigawatts of PV operational now to a whopping estimated hike of 740 gigawatts in 2030. This is more than 3.5x the present day installed capacity, right, in less than 7 years. Germany alone will increase from 65 to 250 (sic) [ 215 gigawatts ]. This is more than 20,000 megawatts per year expected, right? I know this is quite incredible, but the U.S. will beat all records and will experience a jump from 67 gigawatts at the end of last year to an estimated 1,000 gigawatts by 2035 according to Biden administration, right? But I think, more importantly, there will be new -- there have been said new mechanisms put in place to make it happen. I mean, in Europe, we have the REPower program, next-gen funds. There are new laws all around accelerating permits, which we have all identified now as the major constraint in the industry and some things are getting better at least in some countries. And the Inflation Reduction Act in the U.S., it's been a long-awaited, very important milestone which clarifies the tax credit mechanism to basically monetize tax credits in an easier way. And -- well, we mentioned storage, it's definitely happening now. It's already present. We'll enable more renewals, more PPAs. Will minimize curtailment of projects. And it's finally here, storage, right? It's going to completely transform our industry. Why is Grenergy doing about all these? Well, first of all, we have to say we have a fantastic team, which is poised to make the most of this fantastic opportunity. Even if the opportunity is so huge, but you don't have the right team in place, you cannot really get the most of the opportunity. We have a very ambitious development plan in Europe. Apart from Spain, we are now in Italy, U.K., Poland and Germany. As you know, these 5 markets comprise 80% of the total energy demand in Europe and 80% of the opportunity, right? Germany, maybe the best opportunity we've ever had. And we're talking about 20,000, again, megawatts per year. And all regional governments are making teams this year, with permits to develop new projects. I mean we will keep updating you about this very promising market. In the U.S., as you know, we decided to purchase an existing developer earlier on this year, Sofos-Harbert, in Alabama. And now after the ARA, I think the timing of this deal look fantastic, right? On storage, well, our response in storage, you know, we -- I'm very sure we have one of the most talented teams for batteries in the industry, and our fresh projects are about to come. Once again, in Chile, which we always say is one of the most advanced renewable energy markets in the world. We are very excited about moving on with our fresh storage project. Moving to the next slide, just a more visual overview of our platforms on Slide 5. It's quite clear we're making a huge effort to diversify our presence and generation of revenues from been quite a successful player in Latin America, mainly Chile and in Spain. We are now expanding to other countries and new regions in Europe and -- well, with our expansion into the U.S. and everything I mentioned, I think, well, the best is really yet to come. We currently have 11.4 gigawatts, that's 45% LatAm, 38% Europe, 17% U.S. Our storage pipeline keeps growing and maturing. And as early as 2024, we expect to deliver energy for our first projects, right? And I think this is great news. We are declaring now 7.7 gigawatt hour in the 3 regions, with a major focus in Chile. We will give more information in the pipeline section. Moving on to Slide 6. Well, you might be very familiar with this slide. We're more convinced than ever on our integrated approach. I think the only way to achieve the lowest CapEx, development and construction, right, and OpEx, in our case, Operation & Maintenance and Asset Management. The only way is having the right teams in building a strong corporate structure. And in our case, you know we are aiming to build more than 1 gigawatt annually from our Service 2023.We are nearly there. We need to make sure we have the right people to produce the right staff at the right time in the right markets. It also means having the best teams in energy origination, right, to secure the right PPAs. We have one of the best structured finance teams in the industry. We are now closing minimum 4 deals per year. This is 1 deal per quarter. And well, M&A. M&A is more important than ever in our industry, both in the buy side and sell side of the business. It provides us with the flexibility we need and fits our very unique and successful rotation asset program. Moving to Slide 7. As we can see -- and is one of the main updates of the day, we have a new target of 5 gigawatts for 2025, 1 gigawatt hour of storage for the same year. We are very happy to, let's say, shed light for the first time on a target for batteries. We are definitely early arrivals in this field, and we are creating a very adaptive pipeline in key markets and some projects with COD as early as 2024. As we always say, the massive interaction of batteries represent an extraordinary revolution and opportunity in our sector and well, it's fantastic to have the pipeline on time. Big transformation also in our geographical presence, right? Right now, in 2022, we have 1.4 gigawatts in operation or under construction. This is mostly in Latin America, 75%, and 25% in Spain. Basically Cuenca, Castile-La Mancha plant. But here, on the pie chart to the right, we see a huge transformation with Europe only 3 years from now, will represent 45% of predicted operational or under construction and remaining 45% will be LatAm and already 10% in the U.S. So this represents a very important transformation. In Slide 8, here we show you how we're going to make it, where we take a look at project by project, strategic operational targets for next year deployment, which will be led by Spain and LatAm still, right? There is full visibility on the projects we have under construction. And those in backlog, well, they are -- very, very shortly, we will start construction, in particular, the -- large projects in Spain. In some cases, before the end of this year, we will reach 2 gigawatts, considering projects operational and under construction. And how are we going to make it from 2023 until 2025 to reach the 5 gigawatt target? We are aiming to start building 1 gigawatt per year. It will -- they will come from our 3 platforms. Most of these projects are already in our advanced development list, right? I think 90% of what we need. And we estimate 1.4 gigawatts will be coming from Europe. And I really believe it could be more, right? If the permit -- if the permitting process gets somehow a better than it is now, we're estimating 1.1 gigawatts from Latin America in this -- per year, and 0.5 gigawatt already from the U.S., this will be more at the end of 2024 or during 2025. And most of these products are already identified in the advanced development mix. It might look, for some, ambitions, right? For us, it's completely achievable. There are going to be projects, PPAs, markets to do this and a lot more. And I think the potential is huge, and it's -- well, I think we might make some help, maybe with the acceleration of permitting in some countries. But we believe we are -- we have the right people, and we are correctly financed to achieve this, right? Moving to Slide 10. This is the slide of ESG ratings. I'm particularly proud about Grenergy's remarkable position as one of the ESG leaders by the most relevant global ESG ratings. In 2022, our results were further upgraded from a very good place that we had in the previous year, right? I have to say in sustainalytics. For example, our score improved from 13.6 in 2021 to 10.2. And we are ranked -- our company is ranked 6 out of the 680 companies. And [indiscernible] 1% right in the entire utilities group. And the agency, once again, considered our management of all the ESG material aspects: governance, business effect, human capital land used by diversity among others, as quite strong. our Morgan Stanley MSCI ESG rating was also upgraded, and Grenergy achieved the highest rating, AAA, and an overall industry adjusted score of 9.8 out of 10. And according to MSCI, we lead our industry peers on areas like capturing opportunities in renewable energy, talent attraction, initiatives, governance structure, right, among other factors. ISS ESG, well initiated coverage of our company last quarter, and it resulted in a very positive score, again, ahead of all our peers. And finally, just very recently, we were also covered by one more agency, Refinitiv, who ranked our company's second position within the entire renewal energy group. As you know, ESG ratings are, I believe, quite important to inform our stakeholders about ESG performance. And this consistency, I believe, is very positive results in -- it's a very clear sign that we are working in the right direction. Moving to key highlights. I think it's been a long introduction, so I will brief with the key highlights, and Daniel will give you plenty more information. I think it's been a transition quarter, not much build-to-sell activity, which, again, like normally traditionally every year, it's expected to increase exponentially in the Q4, right? Well we've had an important increase in our metrics compared to the same period last year, EUR 172 million revenues, EUR 27.2 million EBITDA and net profit of EUR 13 million, which has been benefited from the FX, right? I think in the next quarter, we will not have that positive effect. But on the other hand, we will have plenty of build-to-sell activity that's how we'll offset this effect. Looking -- going to the composition of the EBITDA, we generated the bulk of it from our energy division. This is EUR 28.4 million of contribution, right, and just EUR 4.7 million from our build to sell. We will -- Daniel will give you more information. On the capital market, after having launched quite successfully and with great demand, our capital increase of EUR 90 million in June. We remain a bit more quiet. And the main highlight of this period has been the renewal of our green commercial paper program this quarter in a more difficult environment. So I think it's been a good success. I think moving to operational execution. I spoke a lot in the introduction. I'll give you more information in the pipeline section. So just a quick summary, 11.4 gigawatt total pipeline. We have reduced this -- the figure of identified opportunities. We will explain to you later why. And 1.4 gigawatts, either operational or under construction, 760 megawatt in backlog, right? And for us, backlog is mostly a preconstruction phase, right, because -- and I will give information about the Spain. We have received the DIS, expected environmental permits in all the projects, except Tabernas in Almería, where we have positive reports and we're expecting to get the DIS before the end of the year. As you know, there is a deadline on the 25th of January. We really expect that -- and this is what we have informed that we will get the DIS before the end of the year, latest in very early January for this project. On the ESG front, well, we continue to make good progress in the implementation of our ESG Action Plan 2022, and our team took actions to fulfill 4 objectives, right, as Maria will comment on later. These actions taken threaten our current systems to ensure the implementation of our policies and the closer monitoring of ESG KPIs by the management committee. We completed the full assessment of gender pay gap with very positive results. And virtually, no gender-related pay gap was found, as Maria will explain. And again, we obtained very good results in new rating coverage this time by Refinitiv, as I explained before. So well, I think I give the floor to Daniel for the financials. Thank you.

Thank you, David. I'm going to try to do it shorter as we have many slides, many sell-side analysts want to ask. Revenue will plus 14% year-on-year, EUR 171.7 million. The big increase compared with the previous year is coming from the energy sales division as we have a much bigger portfolio. That is producing more energy sales. Moving to the next slide. EBITDA, that is the way revenue is reflected, increased almost 50% to EUR 27.2 million. Is this happening in revenue? And this division is the main driver within the EBITDA, EUR 28.4 million. Well, it is also quite important to mention the development and construction that, as you may know, it is mainly build-to-sell activity. During the third quarter, there weren't any sale of projects. So the EBITDA in that quarter was slightly negative. And as we are advancing in farming down negotiation, hopefully, we are going to close it before the year-end, and that figure should increase. Also quite important to mention corporate expenses is increasing as the company is increasing the footprint worldwide within the 3 platforms where we are located, means to hire talent and to keep this growth path. Moving into next slide, which is number 15. This is a split of the CapEx that was EUR 102.9 million within the period. There was EUR 4.5 million in the minority investment in the purchase of the U.S. developer, Sofos-Harbert. Then we have EUR 8.6 million in development CapEx. That is the key driver to constantly grow our pipeline that will feed our portfolio. And then in construction, we have EUR 10.6 million in utility scale projects, mainly the projects we are building [indiscernible], in Chile, there will be -- this field will grow in the next quarters. And then we have distribution projects that are PMGDs project in Chile and some projects and some projects under construction in Colombia, EUR 79.3 million. Then in Slide #16. We started with a cash balance position of EUR 68.7 million. That it is positively affected by the EBITDA, EUR 27.2 million. Then we have noncash operating -- sorry, we have a negative working capital impact of EUR 34.1 million. That is produced mainly for collection, expected to be received in coming quarters from the rotation of assets, mainly in Chile. We have more than EUR 50 million expected to be collected in the coming months. We have EUR 14.7 million of negative financial and taxes cash out and some noncash exchange rate differences. Then we have the CapEx, I've just explained. And that is financed mainly with the issue of the green bond, EUR 52.5 million and some commercial paper to then the financial debt that will grow and the share capital increase, EUR 90 million, that could do in June to arrive from EUR 117.8 million of cash positioning at the end of the period. In next slide, which is number 17, you can see the evolution of the net debt and the total leverage. The evolution of net debt is mainly affected by the growth CapEx and the share capital increase are having to a final position of EUR 318.4 million. There is a non-cash-out exchange rate difference. As you may know, we have a lot of activity in LatAm, and debt is mainly in dollar. And there has been an important acquisition of that currency. And that is impacting the increase in growth CapEx, and that negative non-cash-out exchange rate difference is impacting in leverage that is slightly higher than the period before moving to 6.3x EBITDA net debt. Okay. So I'll hand you back again to David.

Thank you, Daniel. I'm going to try to be brief, well, in pipeline. Well, there is -- I mentioned earlier on, there is an important decrease in identified opportunities. Why is this? Well, because you already know, we are only -- we only start to invest development CapEx when the projects are -- well, our development committee approves those projects and they move to early stage. At that point, it means that we start spending basically investing money in the projects. So we have decided to write off some of the projects that earlier on were identified opportunities, mainly in Peru and in Colombia. Why is that? I think we're going to see a biggest expansion of opportunities in the new markets, mainly the U.S. and some countries in Europe. And we -- obviously, the results are limited, and we want to make sure we move to early stage, the right projects. So we are always very transparent about this. Well, we are going down, again, 600 megawatt in operational. We will keep update in this. Even if we give now a guidance for 2025, but we will keep updating the information every quarter of how we are performing. 780 megawatt, under construction; 760 megawatt backlog, 3 categories together, 2.2 gigawatts. In the next slide, which we update every quarter, as you know, we show by region, market technology status. We can see how the new markets are maturing, right? We can see that Chile is our largest market in terms of development, 2.6 gigawatt solar 600 megawatt wind followed by, I think, Spain and the U.S. We have broadly very similar figure under development. Obviously and Spain is more mature than the U.S., but we are around 2 gigawatts. And then we have Colombia/Italy in the range of 1 gigawatt. I think in particularly Italy, we'll grow quite a lot in the next few quarters. This is our intention. And you can see that U.K. and Poland are in the region of 0.5 gigawatt, right? But I think it's giving you an indication to where we are going. Great news that we have more advanced development projects now from many more markets. And hopefully, our backlog will grow exponentially, right, in the next quarters. Well, in Page 21, we give full visibility of the situation. We are now showing more information from this quarter on the offtakers, right? Because this is a very recurrent question. So we've given more information on the agreements we have for selling the energy project by project, projects under construction and projects in backlog that, for us, again, we could be talking about pre-construction, okay? Well, advanced development projects, 2.6 gigawatts. You can see that apart from Spain, Clara Campoamor, this is divided in 2 phases. We hope that the first one of 275 (sic) [ 575 ] megawatt could be moved quite soon to backlog. To backlog, we need to have full visibility on permits and full visibility on the PPA, right? If you don't have the 2 things, we do more projects to backlog, right? So I believe for the first phase of Clara Campoamor, we might move it to backlog in our next update or latest quarters from now. And we have now advanced development from other European countries like U.K., Italy, Poland, and this is a good indication that the pipeline is maturing. Our first projects that we believe will be operation in the States, right? We're talking about projects at the end of 2024, deliveries in 2025. And well, business as usual in Latin America, where we have [indiscernible] especially Chile, more pipeline that we need to meet the target of 1.1 gigawatt. Going to storage, right? I think -- well, as we announced, 7.7 gigawatts. It's mostly Chile. First project backlog, right? This is great news. For the first time, we're showing some progress in backlog. This is concentrated in [ Quillagua ], 50 megawatt to 150-megawatt hour. I think it could be our flagship project for storage, and also some PMGDs incorporating storage are already here. So this is brand new. For the first time, we're showing some backlog storage projects, right, and I think this is something especially remarkable. And well, moving to evolution of CapEx. I think when we reflect this 2021, 2022, this is the reality, on average, during the year. And this is our expectation for 2023. Well, you can see that we believe that the price of panels is getting relaxed, the main reason is -- I think it's there's going to be oversupply. We -- yes, if you look on the right-hand side of this slide, the forecast of new installed capacity is increasing, right, from 135 gigawatt in 2020 as to 230 gigawatt, 240 gigawatt this year. This is 150% more. But the supply, the installed capacity of the main manufacturers is multiplied by 2.5. So I believe that the main reason that panels are going down is because even if there's a very high demand, the supply is growing exponentially, right? Other things like truckers are more linked to steel, prices are going down. Some other components are going up, the inverters, maybe everything related to labor, right? But all in all, I think we are below EUR 0.5 million per megawatt. This is, again, for a large plant in Spain. If we are talking about the smaller distribution plan, this figure will be slightly higher. I'm more than glad to give more information in the Q&A. So I give -- thank you very much. I give the floor to Maria for ESG.

Thank you, David. And -- well, as most of you know, this part of the presentation, we provide always an update on the progress of our ESG action plan. So there was quite a lot of progress in this quarter. We were able to fulfill 4 of the objectives, and I will explain just very briefly each of them. So first, we have strengthened our governance by defining our control system for the implementation of our policies. As David mentioned before, the system is going to be led by the Compliance Executive Committee, who will use a combination of questioners and interviews with each of the policy owners to monitor its implementation and also will submit an annual report with all findings and action plans to the audit committee. It's also planned to provide internal training prior to launching this system. The company also put together a procedure for regular reporting of a selection of key ESG KPIs to the Executive Financial Committee and audit committee, too. And we selected these KPIs, and there's a detailed list of the earnings report on these KPIs based on a double criteria. So meeting financial materiality and also finding a direct connection with the commitments of our sustainability policy. So through these frequent reporting of ESG KPIs, our top management and the Board level committees will be able to better monitor and oversee the evolution of key ESG aspects, like talent attraction, retention, emissions, local development, health and safety, biodiversity, among many others. Our employee training plan was also improved, and restructured by our HR department in 4 dimensions. With this plan, the panel aims to continuously improve our team's skill set in areas like efficiency leadership of communication, also to support the professional development of our people in specific needs that were identified, to strengthen the skills that facilitate internal collaboration and overall performance as well as to continue building energy culture and employee commitment through frequent talks by key personnel. And just finally, to meet an objective that was pending from a previous quarter, our team was able to complete a remuneration analysis of Grenergy's workforce at the global level in all business lines, categories and purchases, taking into consideration our bias variables such as level of training, experience and responsibilities. And we obtained a very positive result of 0.27% of gender pay gap for 2021, meaning that our company doesn't have a significant pay gap related to gender. And that will be all on my side, David. If you want to take it from here. Thank you.

Thank you very much, Maria. I think we can move to Q&A. Thank you.

Thank you very much. And now we are moving to Q&A. [Operator Instructions] Okay. I think we have José Ruiz from Barclays. José, can you hear me? Okay. So he's having some technical issues. He would like to understand. he sent to me a message. If it is improving the environmental permits in Spain and the permitting process, bureaucracy is improving?

Well, it's kind of the hot topic right now. I think things are improving a little bit. I have to be honest with that, but it was very difficult, it can be worse, right. It's -- well, the main reason we are -- and we can be more explicit about that. We can -- we're going to miss our target. We said like 2.5 years of 1.4 gigawatts of fully operational at the end of this year. It's only going to be like maybe 900 megawatt or close to 1 gigawatt. It's mainly because the delay in the permitting process and the delay in the DIAs of our Ayora and Los escuderos projects, right? You remember those, the government had an initial deadline for April 2022, and they gave 9 months extension and some real governments are taking the extra 9 months. In our case, we are -- we have received all the expected DIAs. We are now -- we got then for Ayora. We got then for José Cabrera, and we're still waiting for Tabernas. We know the reports are positive, at least for 5 of the 6 plants. We have already received, this is something, a procedure. You get before they issue the DIAs. Last time they said before the end of the year. At least, I really hope that we will get them before the deadline of the 25th of January. Some people is talking about the new extension, I really hope they don't do it because if they do it, some regional governments will take that expansion, and we will -- and the problem will get worse. Tax situation in Spain. The problem with permitting is on top of the agenda in most of the countries in Continental Europe, and I see in the U.S. as well. And I think we have seen some positive effects, but still there's a long way to go.

Okay. Perfect. Thank you. So let's move to RBC, Fernando Garcia.

And I have 2. So first one, could you elaborate on your advance [ farming ] down negotiations for Q4 in terms of assets in both countries? And there, if you might just sell minority stakes? And this means that maybe you are going to change your traditional build-to-sell model? So that is my first question. And the second one, can you tell us more or less what capacity you expect to complete or to have in operation by the end of 2022 and as well in 2023? And then some clarification here about the 2 gigawatts under construction or in operation. I think that I heard that this is going to happen all under construction by the end of 2022 and also I wanted to clarify this. So these are my 2 questions.

Thanks for your question, Fernando. And well, it's true that we are exploring new options for our build to sell on our asset rotation strategy, which has been very important for us, and it will keep being important. We feel comfortable with the guidance we gave between EUR 100 million and EUR 200 million for -- we gave that guidance, I think, 2 years ago. And last year, we made EUR 103 million. But it was a guidance more thinking in the transfer of, let's say, majority shares of -- transfer of the full ownership of plants, more thinking in distribution projects. And now we are exploring also other options that will be, I believe, the lion's share in the future, like transferring minority interest in larger parks, right? So that's why -- and I believe at 1 point, we will give a guidance on that, like large utilities or other companies do. So far in Q4, we are exploring more transfers in the traditional way. I mean we will transfer -- we have a very advanced deal for transferring 3, 4 PMGDs in Chile. So it will be very similar to the deals we have accomplished in the last few years. And we have an ongoing project and ongoing deal in Peru, but we are talking about majority deals. We have nothing advanced in minority. We are exploring the market in countries like Spain. I believe there is a good window of opportunity to capture value in the short term, selling a minority interest, but that's not going to happen this year. I think if it happens, it will happen in the first semester next year, right? About the capacities for 2022? Well, you have that information project by project. We are 600 megawatt now. We have some ongoing construction, but some of it -- some of the large plants in Latin America are scheduled for Q2, Q3 next year, right? We have Belinchón, really advanced now. We are already installing panels, right? And I think it might get on time for the next update, right? Obviously, we have a great incentive for connected Belinchón as soon as possible, right, because the PPA start in early 2025. So the earlier we connect, obviously, this is all an upside for us. So we have a fantastic incentive there. We're trying to go as quick as possible. And I think we have one plan of 12 megawatts in Colombia that will be connected very soon. So that's the situation for -- at the end of 2023, I think we feel we will be more in the region of 2 gigawatts. It will depend on whether we are able -- I think we are about to start construction in the next few weeks for Ayora, José Cabrera. Also some of these plants in -- well, most of the backlog, we are expecting to be under construction very, very soon, right? The only thing I cannot say 100% is Tabernas because we still don't have the environmental permit. If we get the environmental permit, we are ready to start. Everything has been negotiated. We have the booked slot with Siemens because it takes longer for the substation. And I think that if we manage to start construction, it means that we could deliver this plant during 2023 or very early 2024. So I think the total figure beyond 2023 should be in the region of 2 gigawatts. I'm talking about operational plants not operational and under construction. The figure will be much higher.

Thank you, Fernando. Now we have Flora from CaixaBank with BPI.

Two questions on my side. The first one is a clarification. So you mentioned Belinchón might get on time. When you mentioned get on time, until year-end or for the presentation of the full year results? Because I think I heard during the call you mentioned you could get closer to 900 megawatts installed or something? But maybe you were referring to something else or just to clarify this 900 included Belinchón? So just the timing for Belinchón year-end or February presentation? And then second question is if you could share the percentage of debt you have currently at variable rates? And also what is your average cost of debt blended for the group?

Okay. Thanks very much, Flora. Replying to your first question, it's very clear. No, we are not going to make it. Belinchón is going to be fully operational at the end of December, right? But when we update, I mean, that will be shared on 4th week of February. Normally, we give the updated situation of the pipeline. So what I mean is that Belinchón, we believe when we say we can make it on time, I mean in time for the next update, right, not for the 31st of December. When we say on time, also, let's say, that the PPA for Belinchón starts 1st of January, 2025. So the earlier we connect, the better for us because we will have a very important upside from being full merchant, right, for nearly 2 years. So this is why we are rushing a lot because we have a great incentive there. About the variable debt, the structure of our debt, I think, well, we have -- it's mostly fixed. I mean if you look at the bonds, we have, I think -- correct me if I'm wrong, Daniel, in any of this because I'm just saying, but we have 4% bullet for the bond we issued earlier on this year. I think it was 4.75% for the one we issued 3 years ago, right? It is fixed. This is bullet. This is 5 years. The lion's share of our debt is project finance, and this is obviously changing, right? And well, compared to Escuderos, which is at the lowest, we had a swap of, I think, 0.3%, but the spread, so all in, like 2.5%. Belinchón was with the shop -- when we closed the shop was already 2.5%, plus the spread is lower, 1.75%. So all in, like 4.2%, 4.3% is Belinchón. If we were up for our next [ close ] in Spain now, where the price of the swap, maybe it was like 3.2% -- 3.1%, 3.2% or 3.3%, but is spread. We are talking about 5% maximum in Spain. And if you consider Latin America, you have to increase 100 basis points basically. I mean we are now close in the finance for our large -- we're mandating the banks for Grand Teno or Tamango and the plant in Peru that we're using the same off-taker. We are mandating the banks, and we are expecting all in the region of 6%, slightly lower than 6%, and that's the situation, right? And considering -- well, we are -- we've let's say, open positions, well, the commercial paper, I think, which was close to 0 at one point, I think it's 1.5%, right, Daniel?

Yes.

Now appropriately in the last update. And I think it's still quite competitive. And well, we might be affected by in our corporate debt with banks, which is not very high, but this is definitely affected by higher interest rates. But this is more or less the structure of our debt, whether it's with or without recourse.

Okay. Thank you, Flora. Now we have Jorge Guimarães from JB Capital.

Good morning, everyone. I have 3 questions. The first is related to the PPAs that you are about to sign. If you can give us some indication about the price ranges, both in Spain and in Chile? And if the evolution until final terms, how related is it the evolution of forward curves in the meantime. The second one is on storage. You are giving us some indication of your interest in the storage. So can you provide some type of CapEx guidance for storage? And the final one is there was some news today, I believe, in Spanish press about or inking about potential landscape tax or something. I mean it's -- I don't know exactly how to translate from Spanish to English. But do you see, over the long run, that any possibility of these in Spain? I know that you are also focused on LatAm. So -- and I imagine LatAm, this is not an issue, but at least in Spain as the ground occupation by solar panels increases, do you feel that over the long run, regions might start to impose some type of taxes or restrictions?

Thank you, Jorge. Thank you very much. Well, about the PPAs, it's -- I think, as I mentioned, we are giving more information project by project on our strategy. Well, Belinchón, as you know, we closed the PPA for 65% of estimated revenues. We are now in Spain targeting to secure 75% in 15 years. We are working with different offtakers. We expect to announce some of them even before the end of the year or very early next year. And we will -- well, the market is now, in some cases, in the high 40s. We're talking about PPAs starting in mid-2025, late 2025. So again, we want to have a buffer time -- security over time, let's say, to make sure we have enough time and plenty of time. And we, again, believe there is an important upside being full merchant for the first quarter, like that's the situation in Spain. In Chile, we just announced the PPA for Teno/Tamango plant. We are working now very hard. I'm flying to Chile tonight myself, right? We have very advanced negotiations for these batch of large plants. In many cases, they include PV profile plus storage. It is how the industry will be in the future, right? You will be negotiating a PPA for solar profile, but also will include some hours in the peak hours. So well, we are negotiating PPA this way for the plants in the North, and we are also seeing some opportunities for Peru solar profile, [ PS ] produced in Central Chile, right? And the conditions there are, well, we are more in the mid-30s, which might seem lower. But in Chile, like in most of America, the PPAs are linked to inflation. So you have -- and you get capacity payments. So all in all, with a similar -- remuneration similar to Spain, right? So that's more or less. We also have advanced -- very advanced negotiations for Matarani plant. We will use the same offtaker that we use in Chile. And we are working in many options in Colombia and Peru as well. It's a bit early in Europe. I think next year, at this time, we will be fully involved in negotiations of our fresh PPAs in Italy, the U.K. and Poland. And I feel we will follow a very similar strategy than the one we're following with Spain, depending on market conditions. Finding the right plan and the right mix between merchant and PPAs. Your second question about storage. We always say we wouldn't be looking at the price per megawatt hour all-in for storage. I think it's going to be a lot more important in our business than the price of panels, right? So we will I think, in the same way, we are keeping this guidance of CapEx for solar PV. I think in this slide, we will try to give a guidance of the cost of storage, right? Because I think is going to be a lot more relevant than the price of just panels, right, because it's really important KPI right now. We have CapEx now in the region of -- between EUR 200,000 to EUR 225,000 per megawatt hour, right? You know you pay for capacity. And this is a very important KPI. We believe in our first projects in Chile, where we are targeting 5 hours -- per megawatt hour. We are roughly willing to invest around USD 1 million for a system of 5 hours. It means that you can move 5 hours between day and night, but the PPA at night is close to $100 compared to the PPA given the sort profile of $30 something. So really, really, you're creating a very different animal. I think anyway, the moment we announced our first project and the first project moves from backlog to under construction, it might happen even before 4th of February. We will try to give you more information and explain to you how it really works, okay? And the guidance for -- well, for the future for 2023, we are expecting reductions in CapEx, but maybe to EUR 175 million, hopefully, EUR 150 million during 2024. There are many projects of mining. You know the project for storage is really dependent on lithium. And I think we are always -- it always depend on the situation with the car industry, right? Because they have like 70% of total consumption, right, for this in lithium. But we believe the prices will go down during 2023 and especially in 2024. Sorry -- Okay. Your last question was?

Sorry, David. Just -- how do you see the environment here in Spain? Because you were just mentioning that permitting is improving, but at the same time, in some more developed or more advanced regions, there starts to be some noise about limits or taxes or whatever?

Well, I'm not sure. I hope this is not first news you are hearing today in the press. So far, we have not heard anything about landscape tax or anything in Spain, right? It rings a bell of some other programs. I think -- I don't know -- I think we are -- I think it's a bit enough in Spain. We're not taking a lot more regulatory changes affecting us during this year. This is my expectation, right? But it remains to be seen whether the cap of [ EUR 180 million ] substitutes the system -- the clawback system they have in Spain. And that's, I think, one of the key points. But we are not expecting any new taxes in Spain related to land with that spend. But anyway, it's hard to say anything on this, right?

It is almost the time, and we have still 3 analysts willing to ask. So I will request please just to ask one question. We have Daniel Rodriguez from Bestinver.

Just one question. I speak with one question. We are hearing some noise in Chile regarding power prices, especially the difference between the different areas of the electricity system and that some operators are struggling with their operations there. My question is if you could give us some color on what is going on in Chile and whether your operations have been affected by this situation?

Yes. Thank you, Daniel. Well, it's true that there is bit of a turmoil in Chile now with the PPAs that some generators closed with -- some IPP companies closed with the distributor and distribution companies. We never participated -- we participated in some of these options a long time ago, but we never really, like this PPA because the problem with these PPAs and this is why some companies, I think it's public information, SolarPack announced that their plan, they couldn't meet the commitments of -- and some other companies like Ibereólica are making similar announcement because the problem is that in Chile, with these PPAs, if you generate in the North, and there are some novel differences, right? And this is what I think many people didn't understand that well. This is why we never like these PPAs. You have to sell you energy in the North at one price and then you have to buy energy in 14 nodes all around Chile to meet the requirements of your PPA. If there is a gap and there's always been, but now this gap with a high prices of energy has widened, if there is a gap between one nodes and others, right, then you might have a problem, right? Because -- and this is why it's happening. And this is not really affecting us because we have -- okay, because on one side, PMGDs are not affected by that because they have stabilized price. It's a different regime. And our PPAs, the ones we just announced, our payers produce PPAs, where deal taker is buying the energy right from where the energy is generated. And so it's a completely different animal, right? And I think it's an opportunity for us because if you have now the right pipeline in Central Chile at the right time, there's very high demand of energy being produced there instead of being produced in Atacama. I think Atacama -- the future for Atacama plant it has is storage. That's why we believe that Chile is going to be the first market in the world where we are going to witness and we're going to see like a boom in storage without any subsidies, just because of energy arbitration. You have the lowest LCO in the world and you have a gap between day and night prices. So it's especially for storage, right? So I'm talking about utility scale plants and at all. But it's a very interesting situation. We're living in Chile, and we always say that we would likely to be in Chile because many things really happen there first.

Okay. Thank you, Daniel. We have now Anis Zgaya from ODDO.

Only one question, it's regarding the financing. And I would like to know beyond the rise in rates, do you see increasing scarcity of funding that could be problematic for you?

I don't think. I think there's still a very liquid market in terms of financing. I mean we are really not feeling anything. Interest rates are going up. Some banks might be a bit more selective. I think we're feeling that more in Chile, right, than in Spain, where we have plenty of options for local players, international players, direct lending options, project bonds. Maybe in Latin America, in Chile, some banks are being more selective. I think that from the previous questions, I don't think they're going to finance any PPA. They're looking more in detail on the terms of the PPAs, whether it's really a PMGDs, whether you have some profile risk, whether you have some novel risks. And I think that's why -- but this is something we might be feeling apart from the obvious increase in interest cost. But that's more of the situation in Latin America than in Spain. And you need more than ever strong PPAs. And I think at one point, last year, some banks were, even in Europe, more happy with being full merchant. We've really followed that policy. We believe it could be an upside being full merchant in the first quarter. Then definitely, you need high-quality PPAs with good offtakers. And I think I've always said that the hedging 70%, 75% is the perfect balance.

Okay, Anis, thank you. Okay. Now finally, we have Paul Chabran from Kempen.

I just have one question regarding the decrease of identified opportunities. So that's about 2 gigawatt less than previously. Following your comment, I understand that it's mostly project in Latin America because you are focusing a little bit more in Europe and in the U.S., but correct me, if I'm wrong. I don't really understand why this shift implies to take out such a large amount of projects of your pipeline? So it'd be great if you could help me understand a bit more here.

Okay. Okay. Thank you for a very interesting question. Yes, well, sometimes we are just very transparent, right, on our identified opportunities. This category, we didn't even make it public only 2 or 3 quarters ago, right? So sometimes it's very internal, right? Identified opportunities, it means -- sometimes it means -- and we still have not started investing. So it's a lot more flexible than other categories, right? When we move into early stage, you really have to be worried if there is a sharp decrease because it means that we have been spending time, money, in the development of projects. And for some reason, we write them off. But identified opportunities, the shifts are larger. Look, at this slide, this is where we are now. This is where we want to be, right? And we want more in Europe, we want more U.S., we want more storage, right? So we need to really dedicate all our resources to this goal, right? And this is what we are expecting. And you have to consider that, apart from that, we will have the requirements of CapEx for storage, right? This is what we are expecting. 1.1 gigawatts digital target for LatAm. And we have a lot more, right? And sometimes, these are fantastic opportunities for build and sell. But identified opportunities means that we still have not even started to invest in the projects. If you look at this slide, and you compare that to the previous one in September, the big change comes from Colombia that we are now showing 0.5 gigawatt of identified opportunities. We could have more, but we are focusing on those that we really believe that, that could happen, that could move to early stage in the next semester. We had previously 1.5 gigawatts. I think on the other major write-offs is in wind in Peru, because some of the projects that we had identified, they were good projects, but very long term, 5, 6 years of development. Long, very expensive development because you have to measure with the mask in many. So we believe that it was not worth it to move to early stage so we write them off. Still 11 gigawatts is a lot more than a year ago, right? So you have you look at that in the long term. I knew -- as I mentioned earlier on, we are expecting an important increase in the U.S., we're expecting an important increase in the early. We are expecting might resume our development efforts in countries like Mexico because we believe there is a very good opportunity there 2, 3 years from now. And we will bring in to the table more opportunities in other European markets and hopefully, in Peru and Colombia as well. So that's more or less the explanation. Yes.

Thank you, Paul. I think that was the last question. So well -- yes, thank you very much for being at the presentation. And if you have more questions, you can always ask us.

Thank you. Thank you very much. Have a great day.

Bye.