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

Good morning, everyone. I'm Alberto Sanchez, Head of Investor Relations at Grenergy. Thank you very much for attending Grenergy's First Capital Markets Day, both to those of you that have come to our headquarters and the audience that follows us via streaming. Today, it's a great day for us. We've been working hard for a long time to achieve many of the milestones that are the basis of the strategic plan that we are presenting today. Before handing over to our CEO, David Ruiz, I would like to give you a brief overview of today's agenda. First, David Ruiz will give an overview of our business model and recent track record. He will be followed by Pablo Otín, COO, who will talk about our present and strategy in our 3 core markets. Then David Ruiz will present our strategy around battery storage. After the coffee break, Daniel Lozano, Chief of Strategy and Capital Markets Officer; and Emi Takehara, CFO, will review our investment plan and how are we going to finance it. Then Rocio Fernandez, Head of Sustainability, will present our new ESG road map before moving on to the Q&A session. I would like to take this opportunity to remind you that once the business presentation is over, we will be visiting the Belinchón PV plant. Without further ado, let's kick off our Capital Markets Day with the following video. [Presentation]

Good morning. I see many familiar faces around. So there are plenty of lenders, partners, analysts, many colleagues. I see members of the Board. Thanks very much for coming. We really appreciate your trust and your support all these years. I also would like to say, thanks to our IR, Marketing, PR teams, for organizing this event. It's the first time we do a Capital Markets Day, and I know there's a lot of work here, right? I'd like to start just explaining why we have considered that organizing a Capital Markets Day makes sense at this point. It's not -- again, it's not something we do every year. Indeed, it's the first time we do it. We moved to [indiscernible] 4 years ago. And well, the basic reasons we do understand is the right time to do it is, well, first, we will like to explain you where we are now, how we've reached this point and where we're heading to. I mean we still consider ourselves a very young company with a great growth story ahead. But I think the company has experienced a profound transformation, right, in recent years, and I think is very important that we share some facts with you. Also, we would love to unveil our strategy, build-to-own and build-to-sell, the asset rotation with the new targets. We would like to update our, I believe, our very impressive ESG road map. Yes, Rocio will do it. We are very proud of our achievements. I'm very proud of the recognition that all major agencies are giving us in the major rankings. We would love to introduce new faces, right? We are doing a huge effort incorporating new talent. Well, I mentioned Rocio, right? She's been working with us for a few months now. And also, Pablo Otín, I don't know where you are, Pablo, yes. Pablo is our -- he just joined the company a few months ago as COO. We've known each other for quite a while when he was still working in the U.S. And well, we've been looking at this opportunity. And finally, our paths have crossed, right? And we have the chance to work together. But the main focus of this presentation will be storage, will be BESS, will be -- it's really a game changer. Technology is here to stay. It's not going to solve all the problems of energy transition, but it's definitely going to solve some of the major problems renewables face today, and it's going to transform our industry in the next couple of years. And it's really already happening in countries like Chile, places like California, Australia, and it will happen very soon in markets like Spain, like Texas, once we have the right regulation and some other components. Grenergy has been, for a long time, I would say, more than 2 years, introducing storage in our equity story. And we are now very glad to announce a flagship project, which hopefully will be the first of quite a few, and which will also transform radically the size of our company and accelerate our business plan. Well -- and we finally will introduce the key strategic targets for 2026 as we have been doing every year in November. So kicking off with the first slide. Just the main highlights. I will elaborate a bit more on each point. This is basically where the company is in 2023. We are vertically integrated IPP. As you know, it means we develop, we build, we operate, and that's something very important. I will stress -- I will give more comments in another slide. We currently have 15.5 gigawatts. This is 15,500 megawatts under development, 10.7 gigawatt hours of storage, and very importantly, we are a very -- I think one of the largest construction companies of PV plants in the world right now. Right now, as we speak, we have close to 1 gigawatt of solar under construction. We already have launched the procurement for our first storage project in Chile. This is 0.5 gigawatt hour. And we also have a very active services division, doing operation and maintenance and asset management, right? We are a geographically diversified company. We started up in Spain. Then we moved to Latin America. But we are currently in 3 regions. Our core business is in Spain and Chile, but we are working very hard to develop a very active position in some other markets. We have a very high visible business model, right? That's very important. PPAs are becoming a very important part of our business. Every PPA we sign give us visibility. We have reached already EUR 2.7 billion in energy revenues. This is close to 3 terawatt hours per year, closing per year. This is 2 gigawatts of plants, and that's growing every quarter, right? Also, very important landmark for us is the first PPA signed at peak hour. This is something we announced last week. We closed this with Copec, the largest oil and gas company in Chile. And that's very important because it's the very first PPA we signed, delivering the energy at night and that's going to make a huge difference in the future, right? We have now more than 3 gigawatts in advanced negotiations in the 3 regions where we are. Talking about the track record, that's -- I think the figures are getting quite impressive. We have already built and delivered 1.5 gigawatts. We have financed or close or mandate already EUR 1.9 billion in -- with -- during all these years. We have rotated -- we are a very active M&A company. We have rotated already 1.9 gigawatts of assets, right? And talking about BESS -- our BESS, we are first mover. We are becoming a PV -- we are already a PV-and-BESS company before we were a PV company, a solar company, doing a little bit wind, but we are definitely moving from being that to being a pure PV and BESS. And this best could be -- Pablo will give you a lot more information, but it could be stand-alone, or it could be a collocation with solar. Okay. Moving to this slide. Well, we really like this slide, considering we created this company from scratch back in 2007. Those were the early days for solar in Spain. They were feed-in tariff. We were like a small developer for the first few years in Spain until the tariffs -- the feed-in tariff and the subsidies came to an end. Unlike -- like many of the companies, we have to go overseas. And in our case, we moved to Chile. That's back in 2012. I think we connected our last feed-in tariff plants in 2013. 2015 is a very important year for us, okay? On one side, well, we become a public company. We had an initial market cap of -- this is not entirely correct. It's EUR 35 million. We were a very small company, just 20 employees. We had an EBITDA of EUR 4 million that year, EUR 12 million equity, and we have a portfolio of 300 total portfolio, okay? Another very -- from Chile, we expanded to other countries in the region in Latin America. 2019 is also a very important year for us. We moved to the main market. That time, we had a market cap of EUR 350 million, I think, the day we went public. This is going to be 4 years from now, next month. And well, at that time, we already had a portfolio of 4 gigawatts. We were a company of 140 -- 120 employees, EUR 39 million of equity and EUR 21 million EBITDA. And this is where we are now. So we are in 3 regions, 15.5 gigawatts portfolio. We are close to, I think, more than 500 employees now as we speak this month. And equity of EUR 400 million, EBITDA above EUR 100 million just for the first 9 months, which is what we just published, and a total market cap of EUR 800 million. So if you look at the figures, we've multiplied by, I think, 40x, 40x, 45x the portfolio. We've multiplied by 25 the number of employees, multiplied by 40 equity. We've multiplied by 25 the EBITDA, and market cap, we multiplied by 20. So that gives you an idea of where we are and our track record. We are vertically integrated company. That's very important to explain our business model. Well, first of all, we don't work for third parties. We just do EPC and services, operation and maintenance for ourselves, right? And we believe in this model more than ever. I mean it's the way to get the lowest CapEx and OpEx, maximize the internal rate of return in the very competitive environment in which we are. We develop, we build, we operate our own projects. We don't do this for third parties. We're extremely busy doing it for ourselves. And I think this model helps us also to control our supply chain. We don't need to rely on third parties, give us a lot of flexibility to the deliveries. I mean we can sometimes start buying [ troffers ] or subcontracting whatever takes longer delivery date, earlier than others. And that's extremely important in the moment where we are now. We are developing, as I mentioned earlier on, a big capacity of construction. The company has now, as I mentioned, 1 gigawatt under construction, 0.5 gigawatt hour of our first storage plant. And well, we delivered our first [ planning ] back in 2007. This is 16 years ago. We've got 16 years of experience, and we have become an EPC contractor, which is right now delivering plants. We are right now building plants in Spain, in Chile, in Colombia and Peru at the same time, in different segments. I mean we are ready to build clusters of distribution projects of 10 megawatts like the PMGDs we all know and we did in Chile, but we are also ready to deliver very large plants like the one we are doing in Spain now of Tabernas 300, the one we are just connecting in right now in this month in Chile, Gran Teno. So well, we are basically -- and we are getting ready to be an even larger construction company in as early as 2025. We're planning to have close to 2 gigawatts under construction, and we are getting ready to build plants in the U.S. -- in our new markets, the U.S., Italy, Poland and, hopefully, Germany, not that far away. I think we're doing a great team in OpEx, operation and maintenance and asset management. Every kilowatt hour really counts. And again, running the plants well and making sure everything runs smoothly, it's definitely better and also getting the lowest possible cost, yes. And all this is supported, as I will mention now, with our M&A project, PPA, energy and structured finance teams, which we believe are amongst the best in the industry. This is our regional presence, our global presence, right? We are now in 3 regions. We have 3 headquarters. Europe is handled from Madrid. We have local teams in every country, between 20 and 30 employees in each, right? But we are really integrated within each region, right. Europe is headquartered in Madrid. Latin America is headquartered in Santiago, Chile. And well, the U.S., as you know, we purchased first minority interest in a local developer in Alabama. Then we finally got the 100% interest. And it's -- now we're expanding. Pablo will give you a lot more information from Alabama to other markets like ERCOT and MISO, right? It's -- we believe a great balance between Europe, U.S. dollar and Latin America. In Latin America, most of the plants we are going to have in our balance sheet are going to be in Chile, right? So Chile is 60%, 70% of our presence, but we are also very active particularly doing more build and sell with this orientation in Peru, Colombia. And I think Mexico is booming. Mexico is coming up. Nothing has been done in Mexico in the 4 -- past 4, 5 years. So we believe is the right market to be if you want to have the right stuff 2 years from now, right? Moving to the left-hand side of the slide. Well, that's the very famous inverted pyramid that we use. It's very important the base because this is where we are now. We have close to 2 gigawatts between the operation and under construction. This is only solar, yes. But backlog is gaining momentum. Altogether with backlog, we are giving visibility of close to 3 gigawatts or at least 2.6, 2.7. This is 2024. But look at what we have coming up for 2025, 1.8. And more importantly, right, I know right now, the markets are not giving a lot of value to our long-term pipeline. But for us, it's extremely important, this is part of the pyramid, right, the top part of the pyramid. So we have -- we are giving visibility on the markets where we are with the projects we are working for 2026 and onwards, right? So I think we should really pay attention because we are working a lot in the new markets. And again, Pablo will give you a lot of information, yes. PPAs is the way. When we were born, we were -- there were feed-in tariffs. Then we had plenty of options that we're quite successful in auctions in Latin America. But now PPAs, our business is really about getting the right PPAs, much in those PPAs with projects, right? No matter in which region you are, I think that's the market -- the direction in which the market is moving. We have been very active closing PPAs initially with more -- with utilities, oil and gas companies. This is the PPA we closed with Galp in 2019. This is the PPA we closed with EDP in 2021. Those are the PPAs we closed in Chile and in Colombia. But look at 2023. I mean we are, for the first time, selling directly to corporates. We announced -- we cannot really say the name, but a very large U.S. corporate, right, very -- one of the largest PPAs they've ever closed, and we have closed another one with [indiscernible], which is, we believe, a fantastic offtaker. We just announced the first PPA with Copec. Well, I think Emi and Daniel will give you a lot more information, but look at the acceleration, right? And we are currently working in many more projects also in the U.S. We hope we can announce the first PPAs in the U.S. We are working in PPAs with large U.S. corporates in all the 3 regions. And we are very proud of what we are getting, right? And right now from the estimated production of our plants, 80% will be contracted, right? This is either through PPA and the only regulated plants we have are the PMGDs in Chile. This is [indiscernible]. And the rest will be merchant. So we are following this 20%, 80% strategy. Going to financing, right, and Emi will give you also a lot more information in the presentation. But also we're very proud of what we're achieving. Look what we have secured so far. Look what we just mandated, right? Well, these plans, this is to -- for the construction needs for our plants in the Valkyria project, right? We just mandated 3 banks. And well, our largest project today that we will give you, Oasis of Atacama, I think most of the lenders are going to be here. We really appreciate your support. And well, together with what we've secured and mandated, we are close to EUR 2 billion in debt. We have been quite active in capital markets. It's not really the best time right now, but we managed to secure a capital increase of EUR 105 million in 2021 and EUR 90 million in 2022, okay? So we have proved no plans for capital increase in the next -- at least for the next 2 years. But well, we've shown that we have the capacity to do it. In fixed income, we issued our first bond in 2019, a green bond. It was the first bond registered. It's green in [ March ] and with a yield of 4.75% and a second issuance of EUR 52 million and 4% in 2022. Again, we are not planning to issue bonds in the short term. And we've been working regularly with green commercial paper. Going to M&A. M&A, it's part of an ADN. It's something we have been doing every single year from our inception, right? But it's obviously intensifying. Well, that's in number of megawatts. This is the megawatts we rotated in 2021, 108; 2022, 209; 2026 -- 2023, close to 500, right? And that's considering some of the Valkyria projects. More importantly, right, this is just a small part of our pipeline, right? So we have plenty more projects to build and rotate. So far, we've rotated 58 projects, 1.1 gigawatts. We've made EUR 0.9 billion of proceeds, right? And this means EUR 335 million capital gains, and more importantly, we have -- if you look at the value creation from the asset rotation, it has been going up. Like if you compare the enterprise value with invested capital, we've been around 1.5, 1.6 in the last few years. So it means we are creating a lot of value, and we are really financing growth, and we believe it's a fantastic -- they are fantastic opportunities to increase our capital base, rotating assets. So we will keep doing that in the future. Talking about our pipeline of BESS. I think we have one of the most attractive pipelines in the industry, both in colocation and stand-alone. Identified opportunities are not shown here, right? But we might expect sharp increases in our pipeline of BESS. We are basically working in every single market developing both stand-alone and in colocation. Pablo, again, will give you a lot more info. Okay. And well, the big news is we are introducing today our flagship project for storage in Chile, in Atacama. We call it Oasis of Atacama. And well, the good news is that already we have officially, the first phase under construction and the procurement at least. Moving to our strategic targets, right? And we've tried to explain you in this section our track record until 2023. In this slide, we are unveiling you our targets for 2026, which Emi and Daniel will expand more in Section 4. Capacity, right, I think we are reflecting here gross and net. This is considering that we are expecting some rotations to take place. We stayed here between 350 and 450 per year, right? If you check what we have achieved in Valkyria, we have already transferred close to 300 to Allianz, right? So this is 2025. We're going to give very soon a lot of visibility on our transfer for 2024. 2023, we have already transferred as you know, Belinchón plant and also some PMGDs. So we are really on track. This is when we say that very close to 50% of this global target is already been achieved, either closed or very -- or we will announce very soon, yes. About gross CapEx, we're talking about EUR 2.6 billion. We will give a lot more information. And this is a very important data. Look at -- already 1/3 of our CapEx will be coming from storage. This is purely batteries, right? So it's completely a huge transformation in our CapEx effort, and the good news is we are getting higher IRR from whatever we invest in BESS compared to whatever we invest in purely traditional stand-alone plants. Considering all these, our EBITDA run rate in 2026 will be between EUR 250 million and EUR 300 million, right? This is just the energy business, not considering the asset rotations, right? Well, some people the other day were saying that's extremely ambitious. But really, when we move to the main market, we were below EUR 20 million. I remember, we promised that we would reach more than EUR 100 million as early as 2024. We have achieved that in 2023. And well, I think we have everything we need to make it happen, right? But again, Emi and Daniel will give you a lot more information. So thank you, and I give the floor to Pablo.

Well, good morning. Good morning all. Thank you for being here. I'm Pablo Otín. I'm the Chief Operating Officer of the company. It's my first introduction to this pack -- to this group. And I'm honored for the opportunity. And hopefully, I can transfer the energy that we're going to be seeing over the next slides to all of you because the opportunity is very significant. Over the next 20 minutes or so, I will try not to be too expansive. I would be describing the new markets as well as the traditional market, our thought process, our thinking, our view and what we do, what we're doing. You will see I will be doing this gesture quite a bit because we're going to continue with the theme of 3. We have 3 regions. We have 3 platforms. And we have 3 areas within this -- within our business. So let me start with the regions. So we have Lat Am, Latin America. We have Europe, and we have the U.S. Lat Am represents the past and represents a store of success. Grenergy has been extremely successful in Latin America. Latin America has given a lot to the company over the last years, and we feel very comfortable to operate. We understand that it's not for the faint of heart. We get the point that not everyone feels comfortable with the changes, with the variations, with the things up and down, left and right, but we have the right structure. We have the right team. We have the right people. We are in the right places. And we think that we can make quite a bit and we can get quite a lot from Latin America today and in the future. Then we have Europe. Europe is the present and is the future. And in Europe, we -- like many of the companies, we have gone in ways. So first, in 2007, we started with the development projects in Spain, like many of our competitors and then, like many of our competitors, moved to Latin America because the opportunity was there. So we moved to the other side of the pond. And we came back in 2019 with projects in Spain. And as -- we see the success over the last years. But what you may have not seen is very quietly under the radar, how the company has increased the footprint to other countries, and right now, we operate not only in Spain but in another 5 countries in Europe. And then we have the U.S. The U.S. is the big one. It's the big piece, is the big opportunity and is the one that is going to be there for the long run, and we'll spend quite a bit of time towards the end of this slide. The U.S. could bring quite a lot to Grenergy, so long we do the right things and we take the right steps. So in a nutshell and before I move down to -- pay attention to the slide. Lat Am is the past, the present and the future. Europe is the present and the future. The U.S. is the future. So let's put some -- focus some attention to the slide. As we have seen from the -- in the previous slides, our goal is to have a balanced portfolio. You need 3 legs to the stool, and our 3 legs are Lat Am, Europe and the U.S. And right now, we have a balanced portfolio, a balanced pipeline. So if you look at the numbers, roughly, it's 5 gigawatt, 5 gigawatt and 5 gigawatt in the 3 jurisdictions. With that said, it's very true that the operational side is not quite the same. And still, we have to do quite a pickup from Europe and the U.S. over the next years to come to these ratios of 40% of operational or under construction projects in Lat Am versus 30% in Europe and versus 30% in the U.S. So let's move now into the platforms. So the Lat Am platform is basically the backbone of the company and has been over the last years. We operate mostly out of Chile, out of Santiago. And we have another 4 countries in the region. If we look at the top left table, you can see that roughly, we have 3 different environments. So we have Mexico on one hand. It's a large market and the second largest in Latin America, only second to Brazil, but it's a market that has been dormant. It's a giant dormant. And the pressure in the cooker is building. The Mexico needs electricity. [ Nearshoring ] there is a reality. They need power, and we're preparing for that. We're not rushing. We're not rushing into not firefighters yet. We don't rush into the fire, but we certainly are preparing for what is coming. It's coming soon. Then we have 2 high potential markets with very little penetration yet, which is Colombia and Peru. But worth noting that in Colombia, we're market leaders in terms of solar deployment, and in Peru is a story of success. I mean the reality is that the company is one of the very few that has managed to extract value from all the countries in which we operate. And then last but the least, we have Chile. And we just put a specific slide for Chile because Chile is big for the company. It's important for the company. So Chile for Grenergy is our second home market, and one will argue is the first and certainly is the largest market away. That's out of question. We employ over 100 people in Chile and is the backbone supporting the entire operations in the region. Why Chile? Because Chile offers quite a lot at the macro level. You have -- it's an investment-grade country. It's a dollarized economy, and you have plenty of regulatory stability and transparency, is more European than probably many European countries when we talk about the grid. And an important element as well is Chile is the laboratory of what is going to happen in many other countries in the future. What we see in Chile today is we are seeing in Spain, in the U.S. and elsewhere in Europe in 3 to 4 years. And only that makes sense. Why? Because Chile has been always at the forefront. If you see here on the slide, the penetration of solar in Chile is higher than California, in Atacama is higher California. And why so? Because Chile combines the higher resource in the world, with a very stable framework. So it's not surprised that the first project that were PPA subsidies free or what we call at the time PPA solar happened in the Atacama Desert. So with that environment, we saw a lot of solar. With that a lot of solar, we saw a lot of penetration, and that is bringing opportunities to storage, to BESS, a word that you will hear many, many times through my presentation. And another important topic. Our clients, they need energy. They need energy in everywhere we are. So corporate PPAs, they need electricity, but they don't need any type of electricity. They want firm, predictable and manageable electricity. And we're bringing that solution. They put a challenge to us. We give them that solutions in [ before ], in peak PPAs or night solar, which is some unique concept that we're exploring and that we're helping to not do just in Chile but elsewhere in our fleet. What happens in Chile will happen in Spain in years, and it would happen everywhere else in which we operate. So let me come back here to the Lat Am platform and now look at the right side of the presentation. So let's look at strategy and pipeline evolution. So first is I would love to have a strategy-wide -- a region-wide strategy for Latin America. Unfortunately, with diverse pack of projects, that is impossible. So what applies to Chile cannot apply to Peru or certainly not to Mexico. So we do have a market-by-market approach. And we are very carefully constantly monitoring what happened in each of the countries, and we're adapting our strategy in response. So the truth is that we have a strategy today, and we'll be adopting it constantly to be at the forefront and not make mistakes. And then in terms of -- as David mentioned, in terms of asset rotation in the long term, well, we will rotate assets, what we call build-to-sell in the entire fleet in the entire -- in all the countries, and we will hold some projects in Chile. Pipeline evolution at the bottom of the slide, mild growth. I mean we have plenty. We have 4 giga -- we'll have over 4 -- over 5 gigawatts by the end of the year, 5.5. It will reach 6.5 by 2026. We don't need more. Well, if you recall the cone that we saw a few minutes back, the projects in Latin America are relatively down that count. So we'll basically add to keep that ball in that momentum. So let's now move to the European platform. Europe, again, is the present and the future. Nothing here is going to come to a surprise. I mean I see that you all are quite familiar with the landscape and the numbers in Europe, and I'm certainly not going to be able to give you any great discovery, right? It's certainly not my intention. But one thing I'm going to mention is that while everyone was looking at Spain, while everyone was focusing here, Grenergy already started looking elsewhere. And by the time that the cycle in Spain is almost complete, we have operations in other 5 countries. So we are in 20 -- well, let me just move to the next slide. So we started in Spain, and then in 2020, companies started in Italy and then in the U.K. and then in Poland and then Germany and Romania. And right now, we have 8 offices outside of Spain, and we employ over 65 people just doing development. I'm not talking about back office, just doing development, focusing daily -- just focusing daily in developing projects. And that is going to bring significant growth over time. We're not making announcements. We're just talking about realities. And we have divided this European platform in 3 segments, we call conferences, like in the U.S. So we have the Southern, the Central and the East. So Southern includes our 2 most developed markets. One is Spain. The other one is Italy. If you look at it, I mean, they are quite similar in terms of volume. We are quoting SolarPower Europe long-term projection for 2027, and they are quite the same. We look at 74 and, well, 28, and then the PNEIC, which is the one that probably gives a better reference, 76 and 80. So by the end of the decade, both countries going similar level of deployment, but there's one very different situation among the 2 -- between the 2 of them. In Spain, we have managed to do the entire cycle. And for cycle, we mean from development to operation, from operation to construction. And in Italy, our hope is to move into construction mode by next year. So similarly, but not quite the same. That is not necessarily bad news because we're going to be able to transfer all of our experience, all of our teams from one country to the next as there is a lot of familiarities between the 2 countries. Let's look now at what we call the Central conference, Germany and the U.K., very competitive, very mature and very different environments. Let's start first with the U.K. We moved into the U.K. in 2020. And we're basically chasing how the market has evolved. First, U.K. was PV and then was PV plus storage, and now it's mainly storage. And we're doing the same. Equally, as we discussed in the past about the Chile that is the laboratory of the energy integration in the world, U.K. is the laboratory, is the reference, is the mirror in which every country is looking at in terms of storage. U.K. is years ahead of anywhere else, whether it's 2, 3 or 4, we don't know, but it's certainly ahead. And we're taking all the learning. We're basically grabbing all that for our future expansion. Worth noting that what is a laboratory is not a small one, 50 gigawatt of BESS by 2030. That's the national goal. That equals roughly [ USD 40 billion -- GBP 40 billion ] of investment in the next 7 years. It's real money. And again, it makes sense. U.K. has decided to funnel the growth through interconnectors, through offshore wind and gluing all that energy with the storage. And if you Google, you will see plenty of announcements, not just by us, by our competitors about the storage and the U.K. And now Germany. Germany is not by chance the locomotive of Europe. Germany is huge. It's huge. So as Germany transforms their energy mix, transforms the generation into a fossil-free economy, we'll see volumes but not just this decade, which is huge, 150 gigawatt -- plus 150 gigawatt by 2030. So right now, they're about 70. But in the years to come, this is a long-term, is a market that can solidify, can cement our growth in Europe. So in Germany, we started operations about this time last year, maybe earlier. By now, we have 2 offices, over 15 people, and we're in full growth mode. Our guys there, all they're doing is securing land, securing grid, securing ground, securing land, securing grid. And we anticipate because how the markets construct that we see a significant rush in the next years. So Germany, soon about growing. We reported our first projects in Q2. We'll continue in that fashion moving on. And last, we have our Eastern conference. We have Poland and Romania. I mean it was bold when the company moved into Poland in 2021. And it was even boldest now that we're starting in Romania. But again, it makes sense. If you looked at their penetration levels, they're really low. There's so much ahead -- or so much opportunity ahead of us, yet maybe we're not talking about gigawatts, but certainly, we're talking about this in volumes. And they have exactly the same obligations that we have in Germany, we have in Italy, we have in Spain. On top of that, Poland is becoming a decent surprise, what we call an up-and-coming market. Last year, in 2022, Poland was the third largest market in Europe, bigger than Italy, bigger than France and bigger than the U.K. With that, with a bit of luck because with the new government, we have no signs of that stopping anytime soon. Quite to the contrary, new government is for renewals, and it wants to advance the decarbonation of the industry. And more importantly, and it's just my opinion, we've done what is by far the most important thing for any common company working abroad, which is finding a top team that is committed and is competent. For any company doing what we do, just getting that team is 50% of the work. And we have them. We have them both in Poland with over -- or 12 people in Romania. So very proud of how we're doing on that front. With that, I want to mention one general concept that applies to the entire region, to entire platforms. I mean what we do is not incredibly complicated. We don't do nuclear power. We don't do [ IA ]. What we do is development. Development has 3 things. You have -- need land, you have grid, and you have a PPA. Yes, something that very much understandable. But to do that, you need teams, you need people. And we have managed to build local teams everywhere. So just through this year, we have higher -- over 100 people in development in the different markets, both in the traditional markets and in the new markets. And you can make any announcement you want. At the end of the day, you don't have the people, that is not going to go anywhere. And we have them. That's going to be the biggest differentiation over time. We may not see them today, we may not see them tomorrow, but in 3 years' time, we will see how these teams pay off. And we're particularly proud of being able to attract talent that is committed, share the same ambitions and the same values that we have. It's not an easy thing. And trust me, it's something that we're extremely proud of how we're doing it. Well, let me just move on to the next, the U.S. platform right? Now talking about the cowboys. I mean the U.S. is the future. It's out of question. And David, just make the right call at the right time. When we bought the minority interest in Sofos Harbert in 2021, we know everything that was coming. We knew that something will come in, and I will talk about it, but a lot has come in the last year in the U.S. Sofos Harbert, it was a relatively small company based in Alabama in Birmingham. It should be based in Birmingham, Alabama, and they were focusing in doing development and EPC. In 2023, we bought the entire company. And since, we've done quite a few things. First, integrate them. There was a bunch of people. I talked about how important it is to integrate talent into the company, and we did it in the first part of the year. The second thing, we helped them to grew -- and we helped them to grow, excuse me. We helped them to move forward to become something that is more than just itself but something that is the Southeast first, and then we did a bit of MISO south and now is Texas. And right now, we have a very strong portfolio, and we have capabilities all across the central part of the U.S. Just to give you a sense, we're covering land mass about 40% of the states, about 40% of the U.S. And the 3 ISOs, Midwest, Texas and Southeast represent 40% of installed capacity and 30% of the demand. So we're talking about big figures. We're not covering everywhere. Certainly, we're not in California or not in [ PJM ], but still big numbers. So to give you a sense of what we're talking about, MISO, Texas and Southeast is going to add altogether about 150 gigawatts between now and '23. That is pretty much the same that we talk about Germany, the fourth economy in the world and, this year, is going to become the third. And we're not talking about the entire U.S. We're just talking about these 3 markets. And then a question, and maybe I'm getting ahead of myself, that you might have is why the U.S. and not any other market. Why didn't you focus on Brazil or India or, I don't know, Southeast like some of our [ competitors ]? And the answer [ count ] is because the U.S. is right now the most desirable market to be at. I mean in any ranking that you look at, U.S. come first. Why? Because it's predictable, because it's stable and because it gives you long-term visibility, long-term -- [ long runs ]. Why so? It's going to take a minute, but I hope you follow me and I hope I'm not too boring, is the IRA, Investment Reduction Act (sic) [ Inflation Reduction Act ]. You're going to hear that word a lot through this -- in the next 5 minutes, IRA, Inflation Reduction Act. The IRA is game-changing. It's an innovative piece of legislation that is meant to [ triple-boost ] the deployment of clean energy in the U.S. It's a very thick piece of legislation. It has many different aspects, not just for solar or wind, but basically provides long-term visibility to investors. And we've seen that in the last 12 months, a shift -- global shift to make investments into the U.S. In a nutshell, just very simplistically, what the IRA has done is take the ITC, the main federal program that supports the renewables for solar, and the PTC, the similar mechanism for wind, combine them and make them simpler and put in a very long sunset, 2032, so we have 10 years of run rate to develop projects. And the mechanisms -- the inner mechanism is simple. The more value you provide to the U.S., the more value you get, simple. You give more to the U.S., you'll get more from the U.S. in the form of tax [ grade ]. On top of that, the IRA gives 2 -- or includes 2 important provisions. One is called transferability, and I'm not getting into the weeds, so please allow me here. Transferability means that you can take this tax credit and sell them to anyone that has a tax -- basically paid taxes. So it's a U.S. company. The second one, as I say, expanded the sunset for 10 years. So now you're sitting in Spain, and you can put capital everywhere. And if you're thinking past 2026, is the natural place to look at -- natural place to go. Let me just go back here. So if we looked towards the strategy and pipeline evolution of the slide, I mentioned that we've done inverted movement in the U.S. Pretty much everyone is in the coast, is either in California or in the East and is moving inwards. We started in the South, in Birmingham, Alabama, and we're moving outwards. So we're trying to expand ourselves into new jurisdictions. Every single ISO, whether it's SPP or it's MISO or is ERCOT or is [ SOCO ] requires a specific strategy. That requires specific knowledge and teams, and we're building all this capacity. And then we're doing PV. But when we -- in some places, we're doing PV plus storage in others, and we're doing a storage stand-alone in Texas. We're doing everything. And our goal is to come and increase our pipeline from 4.7 to roughly 10 gigawatts in the next 3 years. I mean we've done it already. We doubled the size of the pipeline between 2022 and '23 from 2.2 to 4.5, 4.7. We'll finish the year around 5, and the expectation is to go from 4.7 to 10 gigawatt by the end of 2026 and have, at that time, sort of our late-stage projects in construction. Before I move on again to David, I just want to finish my presentation with key highlights. One of them is we do have local teams everywhere we operate. We don't depend on third parties. These are our guys. They share our vision. They share our mission. They know what we want to do. They have the same goals. The second key takeaway is we have the right level of competence for both PV and storage. People talk about storage. We know about storage. And the third one is that we are always in the driving seat. We might have some co-development arrangements, but we always lead develop all these projects. So in short, I just want one word. We want to prove that we are in control. We know what we're doing, and we have a clear vision of what we want to be. So with that, thank you, and back to David.

Well, thank you, Pablo. And I'm going to talk about the storage, right, as we say here is a game changer. Let's talk first about this history, is something you all know, but I'd like to remark. This is where we're coming from. When we started back in 2007, the cost of building one PV plant was around EUR 6 million. I would say, in 2010, it was already EUR 3 million, 3.5 million. Look where we are. I mean we are reaching EUR 0.4 million with [ live reported ]. It's unbelievable, but it's still going down. That's really the miracle of energy in the 20th century. I mean that's what is really fitting the whole thing. And now it's going to help storage. And now the future is going to help hydrogen. And it's really, really the biggest change in our industry. If you look -- and I think this graph is very interesting. If you look at the percentage of solar in -- well, back in 2010, solar accounted for roughly 20% of all renewable -- new renewable installations, right, whereas wind accounted for 50%. Look at the situation in 2022, and this trend has -- this gap has been bigger in 2023. Solar is accounting for 80% of global installations of renewables. Wind is only accounting for 20%, and that's including onshore and offshore. And this is not considering storage because storage, you know much better with solar because it needs to cycle every day. And solar really provides more predictable and the match with solar is much better. So we believe that this gap will further increase in the future. But what is happening, right? This is the famous or I would say, infamous DAC curve, right? I think probably was invented in California at one point, yes. And this is the tail, and this is the peak of the DAC. And you can see that, okay, in very sunny places with high penetration of solar, this is basically what is happening, very low prices, even sometimes curtailments and during the day and very high prices at peak, and then in the very early morning, prices go down again. And this is what has been happening in Chile already for a while. This is where -- this happened in California, Australia, and this is what is already happening in Spain. And it's going to happen in most sunny places with high penetration of solar. So storage, it's going to be a game-changer, right, because it's the solution. Basically, it compensates renewable intermittency, provides grid stability. It's helping more renewables come online. And basically, we are moving the energy from here to there, right? And moving to this slide, okay, technologies. It reminds me of the days of when we were discussing whether polysilicon or thin film was the right thing. I think there's no question now, whatever is available commercially is lithium-ion, right? There is no question now. There are other promising technologies like airflow, like cadmium, like -- but definitely whatever is commercially available now is lithium. It's exactly the same battery we use for our electric vehicles, right? And the same revolution that we are seeing in transport is happening, and it's going to happen in generation, right? Here, we are comparing some advantages of BESS against other storage technologies like pumped hydro or hydrogen, right? We are mentioning we are working very closely now. This is very important with some of the major largest manufacturers of storage units. We are now working very hard with BYD and CATL. I think we will work maybe with these 2 suppliers and maybe these 3. We are talking about blue chips in China. Their market cap is around $100 billion for both of them. CATL has been supplying batteries to Tesla for a very long time. Many of the major manufacturers of EVs are used in CATL or BYD, and some companies like BYD, they even have their own brands of cars. So we are working with the right companies. We are -- this is the size of the market. And I think we're taking this information from the latest report from Bloomberg, but we believe it's pretty conservative. We are multiplying the size of the market by 7 in the next 5, 6 years and by 6 or 7 in the 2 regions where we mostly operate in Europe and the Americas. And again, we believe this is a very conservative -- these are very conservative figures because the more the price of batteries go down, the higher the market is going to be and the faster everything is going to happen, and the market is gaining momentum. How this works and this is a very simplified explanation. But basically, as Pablo was saying, there are 2 different markets. On one side is the stand-alone BESS, and the other one is the storage market in colocation with -- mainly with solar, right? The dynamics and normally -- well, U.K., as Pablo mentioned, is the most developed market for stand-alone BESS, is the market with the highest penetration, is the laboratory for BESS in stand-alone in the world, right? All other markets were looking at what's going on in the U.K. And it's more based on capacity payments. There's a little bit of arbitrage, but it's not the main thing and ancillary grid services and other capacity markets. And the market is booming, and we're also looking at some parts in the States and Australia that a stand-alone market is development. But believe me, everywhere else, the market is now booming. In every market where we are, there is a wave of development and is really happening, right? And then we have batteries in collocation with solar. We are on the same side. We have normally a single point of interconnection, right? We're talking about countries with higher or high solar penetration like Chile, like the Sun Belt in the U.S., like Spain, and well, the lion's share of the payments is coming from arbitrage, from the PPAs, we are talking about 70%, 80%. So this is basically what we're doing in Chile. We also have regulation of capacity payments, right? That's something we already have in Chile. That's something that is in California, but we are still waiting in places like Texas and in Spain to have this regulation in place, right, because it's closing really the missing money we need. Okay. Why Chile? I think -- why now? Yes. Well, Chile is a very long country, has more than 4,000 kilometers long. It's a market of 35 gigawatts of capacity, right? It's a market, as Pablo explained, with very high solar penetration, but if we focus in Atacama, that's north of Chile, it's like a separate -- even if it's now interconnected to the rest of the country, still is like a different electrical market, right? With 14 gigawatts, that's nearly the size of Peru or Colombia in generation, right, with the highest radiation wall, the highest solar penetration in the world, we are talking about 50% of global generation, right? And well, the demand accounts for 14 gigawatts. It's -- there is a regulation for capacity. I mean what is going on in Chile? High penetration of solar, lowest COE, there's a regulation for capacity. We believe there is a very attractive environment for business. And there is a PPA market getting developed, and we have proved that closing one of the first, I think, the largest, definitely PPA delivering energy at night, right? And that's why this is happening in north of Chile, I mean, also some places in the U.S. And again, we believe it will happen very soon in places like ERCOT in Texas, in Spain and many other sunny places as long as we have the right regulation and the DAC curve, okay? So we're going to go to video now to introduce our project, Oasis of Atacama. [Presentation]

I think many of you are familiar with the names, Quillagua, Victor Jara, Gabriela, Algarrobal. They have been -- I mean this is not something new. We've been working more than 4 years in this pipeline of projects in the north of Chile. They are very close to each other. And I think it's now when we are putting all the pieces together, right? And you know Quillagua is an operational plant already. The first phase is operational in PV. So it will be the first plant to be -- to get built. The second phase will be Quillagua. The second phase of Quillagua is complete. These -- all these plants, except Algarrobal are completely ready to build. Again, we have been working very hard in the last 4, 5 years to have the right staff at the right time. No other company has nothing even similar in Chile, putting together these parts of this size and we are talking about nearly 1 gigawatt of solar, and we are talking about 4.1 gigawatt hour of BESS, right? Also, I didn't mention before, coal plants are getting closed in Chile. I think the last will remain -- will get closed in the next 3, 4 years. So definitely, all the market is moving in this direction, and PV and BESS is the answer, and it's becoming the most important way of generation in Chile. And everybody has understood that. A very ambitious project. Again, 1 -- let me repeat that, that's very important, 1 gigawatt of solar, 4.1 gigawatt hour of BESS. We are doing this in 5 phases. Great news is -- and I think that's the most important thing. We have already contracted the first 3 phases, right, with the announcement we announced last week with Copec, EMOAC, is -- again, it's like Repsol in Spain, is the largest utility, oil and gas company in Chile, investment grade. We are very close to announcing the PPA for Phase 4 for Gabriela. I think we will announce that before the end of the year. And it will only remain the Algarrobal plant that we are in advanced development but is still not ready to build. The other plants are ready to build. So we have the plans. We have the PPAs. We have also mandated the banks, right? I think Emi will give you more information. Many of you are in this room today and is -- I believe, is the most exciting project of renewable energy in Latin America right now. And very importantly, we have closed or we are closing the procurement, right? And well, in fact, we have invited our -- one colleague from BYD. Thank you, Camilo, for coming, yes. So yes, we are working very, very closely, and you have the chance to speak with them with companies like BYD and CATL, right, because they really have the right staff right now. This is an important slide, is a case study once all the project of Oasis of Atacama is completed, right? We are talking about the project of 944 megawatts. That's close to 1 gigawatt this peak of solar. We're talking about the highest resource in radiation in the world, 2,800 on average. Some plants like Gabriela maybe have the highest radiation in the world, more than 3,000 hours, right? So on average, we're talking about 2,600. We're talking about 2,600 gigawatt hours per year. This is what the solar plant produces, right? Okay? So we're looking here, this is what the plant produces. Then we have the storage system. This is the nominal capacity of the system. We are installing 5 hours. So it will be -- we will have 4.1. This is a mistake. It's 4.1 gigawatt hours. This is what the plant is ready to store per day. We are in Atacama. Basically, we can charge the batteries nearly every day, okay? So that's going to be the production of the battery, or you can say the energy that comes from the solar plant, goes to the battery and gets discharged, okay, to the net. And from all this energy, we have contracted -- we are planning to contract at least around 70% -- 65%, 70% of the energy. This is contracted, 15 years PPA indexed to inflation, right? That's very important. We are selling the energy 3, 3.5x higher than what we would sell in a solar PPA, okay? And the remaining energy we are delivering in the best peak hours, right? The way it works, I mean our battery, we are going to sell the energy in the highest price, normally will be the peak time. But if for any reason, the highest price is at 1 or 2 a.m., we will deliver the energy there, right? So you also have like a trading benefit, okay? So that's the plan. And then we still have some solar energy. We are selling that because obviously, we are using the -- we are taking the energy to charge the batteries in the lowest price or whenever there's curtailment or whenever [ at 0 ] prices, we take those hours to charge the battery, and we keep the best nonpeak hours, solar, to deliver that energy. This could be merchant, or this could be close to another PPA, or we can use even our retail [ useness ] to optimize the whole thing. Once everything is completed, we are talking about [ EUR 1.4 billion ]. We're talking about this will be -- we are considering [ EUR 0.6 million ] per megawatt. This is including substations, interconnection lines and, obviously, the cost of the plant. And then we have -- we are considering a total cost of [ EUR 200,000 -- EUR 0.2 million ] per megawatt hour. So all these taken in consideration, we are talking about a project that once completed, will have revenues between [ EUR 200 million and EUR 220 million ], EBITDA between [ EUR 175 million and EUR 200 million ] and a gross margin between 85% and 90%. And the most important thing, we are working with a higher internal rate of return than the high single digit or between 9% and 11% we are considering for solar. So we are growing, but we are growing more profitable. So thank you. And I think I'm going to give the floor to -- sorry, no, yes, I'm going to give the floor to...

Yes, we are going to make now a coffee break for 15 minutes or so. So we will get back with presentations on the financial review and ESG review. Thank you. [Break]

Okay. Good morning. Thank you very much for attending, especially my friends, sell-side analysts that are coming from London, some of them are from Madrid, Tunis, Paris. So we have been talking about our track record. I think it's an impressive track record, not only developing, but building PPA financing. We have been explaining about our markets. As you may know, we have a lot of experience in LatAm. But we have moved that experience to Europe, now expanding into U.S. And well, let's talk about numbers. So -- those are our key strategic targets for 2026. As you may know, normally in Q3 results presentation, we are providing some guidance regarding our strategic targets. For the time being, we have just published targets for installed capacity. In this case, we have a 2025 target in previous Q3 result presentation of 5 gigawatts of installed capacity for solar and 1 gigawatt hour for storage. Last year was the first time we provided that target. This year, we are not only providing installed capacity, but we are splitting it between gross capacity including the assets we are rotating to third parties and the one that we want to keep in our portfolio. As well, we are providing total CapEx. We are considering for this period being conservative using the current CapEx cost and EBITDA. EBITDA, as you can see, we have split it between energy EBITDA and rest that should be mainly build-to-sell minus corporate. And run rate EBITDA considering 2026 projects that are connected fully operational from the beginning of the year. Then in the select 32, as I said, we are providing installed capacity. Right now, as of today, 2023, we have 1.7 gigawatt of installed capacity in PV. That include 860-megawatt in operation from the latest update we provided to the market in Q2 result presentation. We have taken out Belinchon project. Belinchon, as you may know, has been rotated to a very good price. That is not anymore in our portfolio. And Gran Teno that was under construction now is in operation and should be providing energy sale full capacity very soon. And then, of course, we have more projects under construction to reach that 1.7 gigawatt. This part of the slide is showing mainly Belinchon as a rotation and some PMGDs distribution asset in Chile that we sold in Q1. For 2026, we are considering a net capacity of 3.5 gigawatt of installed capacity. That is split among different -- the different regions where we are 40% should be in Chile, 30% in Europe, 30% in U.S. From those 3.5 gigawatt to reach 5 gigawatts of gross capacity by 2026 to be the project we are rotating during the period from 2023 to 2026 that as David has anticipated, we have increased the asset rotation target from the previous one, 100 to 200 megawatt. As in the past, we were rotating a smaller project distribution asset normally because those are the projects we were developing back in the past. Now we are developing much bigger projects. We have much bigger pipeline, and that's the reason we feel comfortable to increase this asset rotation target that a big part of it has already been accomplished with the recent announces in Valkyria. So we are considering a rotation of 1.5 gigawatt within this period of PV solar projects. Then on the right side, we have storage. We have multiplied by 4 previous year targets we had in place of 1 gigawatt hour by 2025. As you may see, this is mainly Oasis Atacama. We have more opportunities to increase, but it's not in this current business plan. And we are considering the rotation of one of the projects included in the platform or it could be a minority stake as well. That rotation in both PV and storage is helping us to finance the growth we have ahead, the equity of the project we want to keep to have a recurring EBITDA producing nice cash flows. Then talking about CapEx plan. CapEx is accelerating. As you can see in last year, we have been moving this figure up and up. That's good news because as show, we are investing a very profitable returns, and this is what it's showing our execution capacity. For 2023-2026 period, we are considering EUR 2.6 billion of investments that is coming 60% for the project we want to keep in the portfolio for 2026 target, 30% to be the CapEx we are investing for the project we have rotated to third parties like the really recently Allianz deal. And then 10% is development CapEx. Those investments that we are producing to keep growing our pipeline that is the best investment we can do. Regarding on the right side, I would like to explain a little bit the evolution of CapEx. As you know, there has been a very deep downward trend in CapEx, both for PV and BESS in the last decade. It is true that in 2020, with COVID, there was quite an impact after that because of supply chain issue suddenly, all the projects were under construction were stopped. There was an average stock of panel and in 2021, it was the other way around. It was an over demand for panels, for logistics that created an inflation from $0.17 in 2020, for models to almost $0.30 in 2021. Now we are negotiating for 2024 below $0.30, and we consider this deflation will continue. This is not only the part that has deflated over the last year. Logistics was EUR 20,000 per container, you need 3 containers more or less per megawatt. So EUR 20,000 in 2021 right now below $2,000. Steel prices that is affecting trackers, for instance, was $1,200 per ton. Today, it is $600 per ton, half of it affecting steel. So everything is helping to move CapEx down increasing project returns. Why is that polysilicon prices but as well industrial capacity has moved up from 150 gigawatt worldwide production in 2020 to today, that in 2023, the expected industrial capacity worldwide is going to be close to 500 gigawatts. That is pushing prices down. For BESS, it's quite the same in 2021, we were having almost the double price we are getting right now, and we expect this deflation to continue because of the booming of mining in lithium and industrial capacity as well from main best suppliers like [ BYD, Cadel ] and more Chinese player. Politically, if I may. As you may know, they're Europe and U.S., they want to create their own industry to promote renewable energy. I think this is the way China is answering to that goal by being more competitive, so they have more difficulties to create it. Well, this slide is quite impressive. We have a great team signing PPAs. As you have seen in previous slides, this year, we are above 1 gigawatt of PPA signed. This is key. PPA is giving you the revenue stability, so you can finance at a good term your projects. So without a PPA, it's by far more difficult, cash flow are not the same for bank for risk perspective. And we are normally contracting 80% of the energy we save, 20% should be merchant. We need to leave some part to a merchant. 15-year is the period we are targeting for those PPAs. Normally, we want to sign payers produced PPA. So we don't have the risk of a lack of production, dollarized or euro for dollars PPA, like the one that we are closing in. In Chile, we are considering inflation adjustment in the contract, yearly inflation adjustment. So for instance, if you consider a peak-hour PPA that could be closed between $80 and $90, the day it starts in operation, it should be close to $100 in addition to the capacity payment that -- well, as David said, we will receive in Chile. So we are able to sign PPA with oil and gas, with utilities, with corporates. Really recently, this is a premium PPA. This is the game changer PPA we have closed that will provide support to 2 gigawatt hour of storage system in Chile with EMOAC that is the renewable subsidiary of Copec, and we are negotiating another 2 gigawatts of PPAs not only in LatAm, but a big part as well in U.S. with -- we are negotiating actually with a big tech there like Microsoft, Meta, Google. So we have well, very good department closing PPAs everywhere. And then EBITDA. So today, we have energy EBITDA above EUR 45 million. This is more than 3x the energy EBITDA we were having a couple of years ago, okay? So this is growing exponentially. Non-energy EBITDA is coming from the rotation of assets that as I said, as we are selling bigger projects and the -- we can keep the value creation in those rotation. This is producing a big part of our EBITDA that is allowing to keep financing the project we want to keep in the portfolio. Then for 2026, we are targeting energy EBITDA of EUR 150 million, EUR 200 million. The lower range of this energy EBITDA actually is quite conservative because if you just consider the Oasis of Atacama project, the one that should be in operation by that date, the -- just with that platform, it should be in EUR 130 million, EUR 150 million. So we are quite conservative in that case. Front rate to be 250, 300 that is considering the rotation of 100% project. As you know, if we sell a minority stake, we can keep the EBITDA. But we are considering rotation of 100% projects. Project returns up to 11% in solar, up to 14% in storage. The range, it is dependent on merchant prices, especially the one that we are getting in the period while the project is in operation normally and the PPA start. As you know, normally, we are closing the PPA. The PPA starts 1 year ahead the project start in operation. So we avoid lack of production risk. And as well, we have higher merchant exposure during the first year. So depending on merchant prices, that's the cause of this range. Then the base case is considering 30-year lifetime for PV, 25 years for BESS, CapEx, as David said, include 200,000 almost $1 per megawatt for interconnection cost, it should be less and the current CapEx level we are about to sign as well inflation normalized of 2% that right now, for instance, this year, it is above it. And depending on CapEx and inflation adjustment, you have, of course, sensibilities over this business case. So now I'll hand you over to our CFO, Emi Takehara, that is going to explain how we're going to finance it.

Thank you, Daniel. Hi, everyone. So a key question for many analysts and investors is related to the funding of our business model. We wanted to start off by providing an update on our M&A strategy which, especially over the period 2023, 2026 since 2003 is really marking a turning point for the company. As you know, we announced previously a target of 120 megawatts asset rotation per year over the past 3 years, and we updated this target to 350 to 450 megawatts per annum over the period 2023 to 2026. This is a huge increase. We expect this to be multiplied by 3 since we have increased our pipeline, and we are confident that we can now rotate larger utility-scale plans. It's also an opportunity for us to set a very high valuation for these assets given the current market prices. This is true for Spain. This is also true for other markets in Latin America like Peru, and it's truly an ideal funding strategy for the group and for our shareholders at the moment. We are confident that we will meet this target of 350 to 450-megawatt asset rotation per year. Since we have already achieved 50% of this target over the period '23, '26 and more than 2/3 if you only consider the period '23 to '25. We will announce in Q1 some very positive news about asset rotation in Peru in the first quarter. And we wanted also to provide right now an update on the largest process that we have currently in Spain, the Valkyria process. So you have here a summary of the transaction that you all know. This is truly the first step for us on this new larger-scale M&A journey. We announced earlier this year the potential sale of 49% stake in a 1.1 gigawatt portfolio. In order to achieve the highest possible valuation, we decided to sell a 100% stake instead of 49% and focus on fewer assets. So as you can see, we achieved the first milestone in Q3. The first deal of 150 megawatts was transferred successfully in Q3 to EQT own company at a very high valuation of close to EUR 1.2 million per megawatt. The second milestone which is the largest, is the deal that we recently announced with Allianz for close to 300 megawatts. This deal is also -- has been completed with a very high valuation of close to EUR 1 million per megawatt and will be transferred at the end or probably during Q2 2025. So this means that as of today, we have completed 85%. We have delivered an 85% of the Valkyria process, we sold close to 450 megawatts of assets in Spain in total, at the high end of our valuation targets. As you can see, we decided to keep the Escuderos project, the 200-megawatt project that we have in operation in Spain, which is a fantastic project with very competitive financing and also offers huge upside combined with storage. Ayora is next on our M&A target, and we will provide some updates in Q1. And as you can see, Clara Campoamor was also part of this large portfolio, and we will assess under due time what to do with this asset, which is also benefiting from a PPA that we announced earlier this year with LyondellBasell, a 15-year PPA under very attractive terms. Now moving on to financing. It's worth noting that the largest part of our funding will continue to be project financed. We still continue to target around 80% of leverage at project level, at senior level. And as you know, as an integrated player, we'll continue to develop and to build our solar and storage projects, therefore, monetizing a 5% to 10% development and construction margin. This translates into a CapEx coverage of close to 85% to 90%. We also wanted to provide some update on the upcoming deals, the largest transactions that we will close shortly. First of all, in Spain, Valkyria assets are currently under financing. This represents a financing of close to 500 megawatts. We decided to finance this project under club deal format with international lenders, MUFG, Natixis and Santander. This short-term financing is providing a very high CapEx coverage with leverage -- expected leverage of 80% and very competitive terms with margins below -- well below 2%. Now moving on to Latin America. The second financing, Oasis Atacama is by far the largest financing of Grenergy. The financing will be close to USD 1 billion. We decided to -- we've been working on this financing for the past almost 6 months. It's been difficult to structure because we wanted to achieve very competitive terms. And we are glad to announce that we managed to mandate 5 entities for this financing. BNP Paribas, Natixis, Scotia, SMBC and Societe Generale. Each one will have a 1/5 of the ticket for this transaction. The conditions are extremely competitive with margins in the 200 to 225 basis points range. And we also achieved very competitive debt sizing terms with expected leverage of 80% of total CapEx. Lenders' appetite for this portfolio, I think I believe, is unmatched and is truly a testament of the quality of our assets in Chile at the moment with the very first investment grade long-term storage PPA signed and announced last week with EMOAC. We're truly excited to structure this deal, not only because of the size because of the PPAs that were signed. And we believe that it's working before and after milestone for the energy market in Chile. Now moving on, on the corporate side. We also wanted to highlight a recent transaction that we announced at corporate level with Santander. So this financing of EUR 157 million is a bilateral loan with Santander with a guarantee of CESCE for 80% of the loan, which means that it's truly limiting the exposure that we have with Santander and also providing very competitive terms that wouldn't be achievable otherwise, very competitive margin of 1.8%. Also a long-term tenor of 8 years with 2 years grace period. We managed to close a very competitive swap, taking the market window opportunity in March when rates were lowered, it decreased by more than 70 basis points which enabled us to close an all-in rate of 4.8% for this financing. There's also an innovative ESG-linked swap associated with this loan, which could further reduce interest rates subject to ESG criteria, such as [ water ] reduction and female workforce as well as local workforce. So we truly managed to plan our growth and anticipated the funding requirements of our business for the coming years. This last slide is summarizing what we said along the presentation regarding our capital allocation and funding strategy. So let me start by reinforcing a key message. In 2024, 2025. For these 2 years, we have managed to fully remove financial execution risks by doing the following. First of all, we managed to sign successfully PPAs for our projects at an early stage and at very attractive prices. Second, we managed to close or in the process of closing, very large project finance at very competitive rates as well as corporate financing. And third, we delivered on our M&A targets, and we managed to achieve more than 2/3 of our initial divestment targets, while the remaining assets are very well advanced, and we will provide updates in Q1. So over the period 2023 to 2026, you get here a summary of our capital allocation. Our new targets for investments over this period are close to EUR 2.6 billion, which will include EUR 1.5 billion of PV CapEx, EUR 800 million of storage, as explained by Daniel. And we're planning to continue to invest in development. This is the best investment we can do right now when we plan to invest close to EUR 200 million to expand in new geographies as explained by Pablo. How will we fund that? Well, as mentioned, we will rely strongly and mainly in project finance close to EUR 2 billion of funding. We will continue to rotate assets with EUR 600 million funding expected from asset rotation, most of which have been already achieved as of today. And we will also rely on this very competitive corporate funding that we recently signed with Santander. There will also be a remaining funding coming from the free cash flow of our projects. We don't need to tap capital markets right now, given this funding strategy, but we will assess, as we've done in the past, windows of opportunities, we will keep our CP program active. We will keep increasing our corporate lines with the pool of lenders present today. And we plan to maintain a very conservative corporate leverage below 3.5x during this period. So as we said, our strong track record in development, in construction, in PPA origination, in project finance and M&A as well as the milestones that we achieved already over this -- for the period 2024, '25 are really demonstrating that we are well on track to achieve our new objective for 2026, which include 3 gigawatts of solar capacity installed or under construction as well as 3 gigawatt hour of storage which will translate as explained by Daniel into a stable energy EBITDA run rate of EUR 250 million to EUR 300 million in 2026. I now hand over to Rocio Fernandez, ESG part.

Yes. Thank you, Emi, and thank you all for joining us today. Let me start this presentation by detailing the 3 reasons why ESG is the heart of Grenergy. Grenergy is extremely committed to sustainability as we believe in a green and transparent access to funds aligned with the EU taxonomy. We also believe in creating a positive impact in both communities and environment in the countries where we operate. And last but not least, we believe in an excellent easy performance as a foundation of our business, making us a stronger business and a more [ trans worthy ] entity for our stakeholders. During the last 3 years, within the framework of the current ESG road map, '21, '23, we achieved many important ESG milestones. For instance, the issuance of the first green bonds program in 2021 or the creation of internal procedure for supervising our ESG KPIs in 2022 or the first third-party verification of our sustainability report in 2023 or like Emi mentioned, the first green sustainability funds with the -- well, of the Spanish market with Banco Santander, and now that we are immersed in the fourth quarter of the year, we can ensure that the current ESG roadmap '21-'23 will be successfully accomplished at the end of the year as we are advancing all the goals for the fourth quarter. For example, we create a report about the climate change risks and opportunities aligned with the task force on climate-related financial disclosure. And once more, one of the most important targets, not only for this quarter but also for the year, it's already finished and approved by the Board of Directors, which is the new sustainability strategy '24-'26. In fact, today, we are launching this new sustainability strategy, and you are the first one in knowing the details of this cross-company holistic and ambitious strategy that we guide our business during the next 3 years. Moving on to our performance in the ESG ratings. I'd like to mention that, as you can see in the figures, in all indexes, we are improving our position from the past years and also we are better than our peers. We are receiving the updated scores in Sustainalytics and MSCI. And as you can see, we bought better results as we reduced the level of risk in Sustainalytics from low risk to negligible risk and we have also good news in MSCI as we revalidate for the second year in a row our AAA score. For the other indexes, such as Allianz Sustainability Index of CDP, we are waiting for the updated results, but we expect also remarkable improvements. Now it's time to give you further details about this new strategy '24-'26. So as I mentioned, I'm honored to have the opportunity to close the current ESG road map, the one more focused on establishing the foundation of our ESG performance. And now I'm glad to have the opportunity to build a new one more focused on the refinement of our ESG performance. We make us -- be well at the forefront of our competitors. Well, as bringing back to the first statement that I mentioned about the ESG being the heart of Grenergy. I would like to say that all of our departments in Grenergy are the veins and arteries that make these heartbeats at the right base because this strategy wouldn't be possible without the help and the fruitful collaboration of all Grenergy departments across the whole areas. So all of us, we created this full strategy, which is a structure in 4 levels from least to most degree of concreteness. So we can distinguish dimensions, driver, objectives and actions. Well, starting from the most general level, the dimensions represent the common key blocks of ESG aspect. But in our case, we want to be a unique -- we want to have a unique approach. We want to be fighters against climate change, protectors of environment, promoters of the best teams and people, integrators of the whole value chain, fulfillers of the sustainable finance criteria, drivers of innovators and enhances of a good corporate governance. Continuing with the next level, the drivers, they were selected after a complex and a challenging exercise of what is called double materiality analysis. This is a new methodology that considers a double impact perspective. On one hand, the impacts over the environment and the people and also over on the other hand, the impacts over the financial aspects of the company. So we did an internal exercise and then we also did an external presentation to some of you, our key stakeholders, investors, analysts, the Board of Directors, and we finally agreed the 9 priorities of the company for the next 3 years which are the one involved in the right side of the slide, sorry, climate neutrality, conservators of biodiversity, circular economy, talent detection and attractions with respect of human rights and so on. So once we define the dimensions and driver, it was the time to set several objectives for its driver. To do so, we've made our best to trying to set miserable, achievable and quantifiable targets in the third, medium and the long term. And finally, to be able to achieve all the objectives we have to set a battery of more than 100 actions to be done in the next 3 years and not only to be reported to the ESG department, but also to the committees of the Board of Directors. And so if you have, well, more interesting in this whole strategy, you can download from the web page, the whole strategy. Well, before closing, I would like just to remind one key target per dimension. Well, as you know, we have 44 objectives, but we can highlight the most important ones as the following. We pursue to become carbon neutral in the coming years to have a positive biodiversity footprint to have the bonus of all employees associated to ESG aspect to have more than 90% of our providers evaluated in terms of ESG experts also to invest more than the 90% of our CapEx in activity aligned with the EU taxonomy and finally, to be able to report correctly the ESG KPIs in accordance with more demanding new directive, which is a corporate sustainability reporting directive. We're trying to equalize the importance of non-financial matters and also the financial matters. So well, that's all from my side. Thank you very much for your attention. And now I'm opening the floor to Q&A.

Okay. Thank you very much. David, Pablo, Daniel, Emi and Rocio for your presentations. Well, we've managed to be the agenda for 5 minutes. We hope to continue beating our targets for 2026. Let's move now to the Q&A session. We will start with questions from the audience in the room, and then we will answer questions from those following the event via streaming. Please limit to one question per participant and announce your name and company name when asking.

[indiscernible]. I have one question. Is it possible to elaborate on the PPA prices of Chile?

I can say it's higher than 80, much higher than 80. We can also say it's been indexed to inflation. That really makes a difference, right? All the PPAs we are closing in America, that includes Chile, mostly in -- well, in the U.S., it depends are linked to inflation, and that really makes a difference, right? but it's somewhere -- I think even above 85%, right, Daniel, yes. So that's all I can read, I can say.

Thank you for the presentation and taking my question. So I would like to know a little bit about solar plus battery [indiscernible] a new model for everybody. I guess that the more important things are financing and PPA. So can you clarify more or less what are the main differences in financing in a solar plus batteries model versus PPA? -- from what you commented financing trends look very good and similar to [indiscernible] I wanted to clarify that. And then PPAs, in particularly, I would like to know how you are delivering the energy when -- what are your obligations there? Is there any risk in terms of grid constraints, et cetera? So anything that should worry us in the future or there is no risk, maybe.

Thank you, Fernando. I think before I leave -- well if Emi answering the question about the conditions and terms, which I think are pretty similar to what we know in solar. Well, there are always risks involved in every single PPA. It's been continuous learning process for us in the last few years. I think what we have achieved in Chile, what we are trying to achieve is, okay, we want to make sure that we are selling energy at interconnection point. So we avoid what is called Chile nodal risk, right? That's, I think, very important, right? Another is the curve. I mean we delivered the energy whenever the energy gets produced. So we have a commitment, but it's a monthly commitment -- I think it is 65%, 70%, right, Danny? So I think we are very, very recovered in that way. And well, the offtaker is buying the energy at the interconnection point at North. They might use that energy all around the country, but that's not really in our -- on our side, yes. And about the -- about how the market is evolving, I mean, only 1 year, 1.5 years ago, many lenders were considering that the storage was something new. They had some experience financing storage systems in the U.S. I think that's the case of some of the lenders that are here today. But that deal has changed dramatically. I mean, there is no single large project in Chile now without storage, right? So if you knock on the door of the lenders, they're going to say, okay, you have no other risk. You have no curve risk because that's the problem that some companies have faced in Chile in the past. But apart from that, either you have storage or they don't even consider your project, right? So apart from that, Emi, I don't know if you want to add anything?

No, absolutely. So basically, I think all international lenders have now huge experience in storage from other markets like the U.S. or the U.K., they were very comfortable with the pipeline that we presented to them. I would say, very interested in participating given the quality of our PPAs, which make total sense in Chile to execute project at the moment. There is no way that projects without storage in the north of Chile could work. Obviously, investment-grade PPAs. So the sizing criteria are basically very similar, whether it's solar storage. One critical aspect which has probably changed over the past few years, is the guarantees that can be provided by storage providers that now go all the way to 20 years. So that's really one of the key aspects that has enabled us to reach high leverage is that you can get 20 years guarantee on the storage, which was not the case probably 2 to 3 years ago.

Nash Cui from Barclays. I also have one question on storage, and I'm looking at presentation, Slide 29 over here, so the math. I think it's a very interesting fact that, Emi, you mentioned about the guarantee from BYD, 20 years. And I think in one of the slides, you also assume a battery life of 25 years. A, am I right to understand that the supplier is going to give you warranty to make sure that you have 70% of the capacity by year 15 then probably like 60% by year 20, 50% by year 25? And that's all considering the deep charging, deep discharging from 0% to 100% because you want to shape the energy. Can we get a confirmation on that? And I also want to understand what's your assumption to get this 11% to 14% IRR after the 15-year PPA? I know it's nice, we have above $85 per megawatt hour PPA price. What's your assumption after year 15 to get your IRR?

Okay. Thank you very much. I think -- well, our procurement manager is here. I think you can -- maybe, Carlos, you're so kind to answer some of the questions about guarantees and everything, if you can come around, please. About the 15 years, about the assumptions we are taking, we are basically considering...

We are considering 2% inflation adjustment from the very beginning when the PPA is signed, then when the plant is operation, the price should be higher because it's in a matter of couple of years and then 15 years considering that 2%.

Yes. But I think same as we do when we give like 20 years IRR, we are considering the extra 5 years merchant based on consultants, right? The same as we do in the conservative side of the consultants prices, right?

And basically, about your question about the warranty period, they and their competitors are given from 20 to 25 years warranty. But apart of that, all of them are considering that if you are above 60% of the life of the battery, it's still working. And that's not the percentage that they are providing up to year number 20. So the reason mainly is because they have not enough experience to 20 -- more than 20 years. But up to 20 years, they guarantee the service of the product, more than 70% of the life of the battery. So they are quoting curve, not warranty, but relief curve above 65% up to year 25. So that means that the batteries are still working.

Yes, I was going to say about augmentation is something you will hear us talking all the time. Extremely easy in storage, right? I mean, yes, we do have the degradation of 2% per year, but you can augmentate at any time, right? And extremely simple, in a few months, you can install more containers, right? And you can come back to the starting point again. And it's also a decision that will depend on the evolution of the price per megawatt per hour, right? But it's not like wind repowering or solar, that doesn't really make sense at all. It's something that we will do very frequently, right? Sorry, Emi?

Yes, I was just going to say that the lenders will see positively an augmentation of the battery. Instead of spending money on paying a high guarantee for the battery, it could make sense to use this money to do an augmentation and to increase the life of the battery. So we expect the life of the batteries to be, yes, well beyond 20 years because of this increasing investment in augmentation.

I would like to add as well that in this base case, we are not considering any terminal value to the asset while it is supposed that it should be 60% percentage after their lifetime. So we will see if what is the terminal value if it's possible to do those augmentation to keep productivity and those augmentation would lower CapEx or we will have some recycling upside, of course.

Paul Chabran from Kempen. Still one question on batteries. I think part of your asset rotation program includes to rotate 1 gigawatt hour out of the 4 gigawatt hour. Could you maybe help us understand what the multiple could look like on the step of transactions because I don't think we have a lot of comparables.

Well, it's -- the figure we are giving is an estimate. It's -- our asset rotation sometimes is opportunistic. I mean we do start -- we started Valkyria looking at more 49% of all the portfolio. And finally, we ended up like farming down like 100% of 13 assets and keeping 100% on others, right? So we will open that process in Chile eventually, right? It will be a much larger Valkyria. Well, working between 11% and 14% IRR give us the opportunity to rotate with even higher multiples, right? But that's something that it will depend on also the evolution of the WACC and the returns expected by investors. And we will explore minority as well as majority. I think in the presentation, we outlined the possibility of forming down one of the 4 legs of Oasis of Atacama, but it might be a minority interest on the whole package. We will explore both ways yes.

Okay. Just to add on that, for the business case, we have presented, we are considering to keep a conservative EV invested capital of 1.3x that it has been able to show over the last year has been more above 1.5.

Just keep in mind, we are talking about projects that have been developed in-house. So we don't need to pay to external developers to buy those permits. We try to keep the CapEx to the minimum considering we are building the plants ourselves, and we try to keep the OpEx to minimum. So I think that's one of the reasons we are managing to get that 1.5 level, even 1.6 in some cases in the last few years. So we don't expect that nothing should change, right?

It's Gonzalo from BNB Paribas. I have 2 questions on my side. The first one would be around capacity payments. And have you already secured these capacity payments for the PPA that you have signed in Chile? And how does regulation work around the capacity payments? I mean will they last the PPA life or the useful life of batteries? That would be my first question. My second question would be around the remuneration of batteries as well, around the arbitrage opportunity. You have mentioned that, of course, you have the PPA contract. But beyond that, there's arbitrage opportunities to capitalize on the current spread. How much of those arbitrage opportunities are you considering within the 200 to 225 revenue range?

Okay. About the -- well, about the capacity payments in Chile, you don't have to get into any market. You get those payments automatically just for having -- I mean there's been a capacity market in place also for solar in Chile. The big question with the regulation is since, okay, there were so many projects of storage coming up. It was becoming clear that the regulator wanted to promote the introduction of storage. So there has been a change in those capacity payments. That's been a temporary, well, as they do things in Chile, normally, they do things quite right. There's been a temporary period that purely pure solar projects will still get the capacity payments, but it's very clear that to get the optimum level of capacity payments, you need to reach 5 hours. So that's one of the reasons behind being able to do. The other reason is that you want to make absolutely sure that your battery gets the full charge even in the worst day at winter, right? That's why in Atacama, we can go for 5 hours. That's why Central Chile will be 4 hours. That's why in sunny places in Spain will be around 4 hours because otherwise, you lose more cycles, right, in -- yes. So that's basically about the capacity. Sorry, your second question was -- oh, about the arbitrage. I think we are not considering...

We are not considering that arbitrage opportunity in the business of scale. It's an upside. We are considering the PPA level. However, as you can see in the spreads that there is now, we might have an upside.

Yes. And there is also a very high upside that we're also not considering for the first year. We're doing -- we're following a similar policy as we did in Spain recently. I mean the PPA are starting in mid-2026. So we have like -- we would not be a full merchant at least for a year. And there's the upside there. But we have considered the flat prices for it, but we are still considered 3 figures prices for arbitrage. Yes.

Anis Zgaya from ODDO BHF. So I have 2 questions, if I may. The first one is on financing. You are only expecting EUR 600 million from disposals on target capacity of 1.5 gigawatts NPV and 1 gigawatt in storage. Is it too cautious, because it seems too cautious? And second question is on your expectation for the build-to-sale activity beyond '26. Should we expect the same turn?

We are not providing a guidance on build-to-sell activity after that period. However, as the company is growing the pipeline and the projects are bigger, and we are in more countries, as you may see, right now, we have rotation mainly from Chile and Spain. Pablo explained that we are fighting hard to create the good ready-to-build project in LatAm, but as well in Europe, in U.S. I assume that we will have more opportunity to rotate.

Yes. Just keep in mind, we are currently delivering already roughly gigawatt per year. We're rotating 300, 350. As we explained, we are getting ready to deliver more because we're going to be more jurisdictions. We are going to be ready, hopefully, to deliver as much as 2 gigawatts per year from 2026. So I think that will increase the opportunities for asset rotation, right? You also asked about the EUR 600 million, but those are the -- this is the margin, right? Yes, in...

Yes, the EUR 600 million that you are mentioning refers to the capital gains that are going to be obtained. There is another slide in the presentation where you see the total proceeds that we expect from the asset rotation with range from between EUR 1.5 billion to EUR 2 billion.

[indiscernible] from Alantra. Three questions, quick ones, please. The first one is on corporate leverage. You are talking of this maximum target of 3.5x. I was wondering when should you reach a peak and how can we calculate the EBITDA? What would be the percentage of IPP or dividends from projects versus D&C? The second one is on asset rotations and following up a bit on the comments you made on Atacama. Is it possible to sell only a battery when you have a hybrid project? Or if there is a disposal, has to be all together? And the third one is on the U.S., and maybe this one is for Pablo. Which are the returns that you are foreseeing in the U.S. maybe by circuit or -- and how do you see them evolving going forward?

Okay, before I forget the first 2 questions, right. No, you cannot dispose -- well, the way we are working in Chile, you have to consider the plan. You have one single interconnection point. So you have to dispose the whole plant, the plant as a whole, right? There are going to be many models -- many moves are coming up, yes. And I've seen once again in Chile, these are being called -- we're starting to call them like [indiscernible] PPAs. I mean you've got like a standalone battery. That's also possible. And you can do the arbitrage closing one PPA on one side, buying the energy and selling the energy with another PPA. So you don't really need -- so it could be like a colocation, but [indiscernible]. The plant could be somewhere. And in this case, you might be able to sell the assets separately, right? But whatever we have in Atacama so far is a single project.

Regarding covenant, the way we are calculating that covenant is just corporate, 3.5x, not considering the EBITDA produced by the project with project financing without resource -- without recourse. So we are just taking into account the EBITDA coming from build-to-sell and the dividends coming from those projects that has a nonrecourse for the finance to corporate. And that's untapped -- well, and that's the way the covenant is built. It's a covenant we are using for the corporate bond we have, and that is the only target we have in place actually.

And just to get back to your question in terms of the volatility, there will always be some quarters that will be quite volatile because of our build-to-sell activity. So I think that Q3 to Q4, there might be an increase. We're going to dispose of assets in Q1 of next year. So there will be an increase, decrease and then probably an increase in Q3 and Q4 of next year, but always bearing in mind that we want to finish year-end meeting this goal of 3.5x.

Is it fair to assume that your corporate debt will increase only in this EUR 150 million that you are adding in the bridge, in the financing bridge?

That's what we have, yes, under our business.

Well, then, so the U.S. The U.S. market, particularly the regions that we operate, are very, very efficient. So we don't -- we're not expecting quite dissimilar ranges in IRR. We're targeting high single digits, which is what the market is. And we're doing it with a number of assumptions. So the current investment cycle climate is we have higher rates. So there, obviously, is a possibility going up, but it's clearly much higher possibility coming down in the next 3 years. And this is what the market is yielding right now. So we're not quite dissimilar to any other. The biggest difference is the regions that is not the typical for our competitors.

[indiscernible] from UBS. Coming back to the storage project, the Atacama project, which I think is a very interesting one, I was wondering what is the -- so one embedded question here, which is I'm assuming there's no upside on more storage projects within the plant outside of Chile. I'm assuming everything that you have there for the plan [ D20 ], this will be an operation in Chile. But thinking a little forward and thinking about your expansion of storage in other geographies, I'm curious to how you're thinking about the structure because this particular place has actually a quite unique structure from a kind of PPA and regulation and financing. So do you foresee this kind of very unique structures happening in other countries? Or do you expect to be really on an ad hoc like project-by-project basis in terms of how you expect the storage to develop?

Well, it's very clear that Atacama is a unique place in the world, right? But I think this structure could be replicated one day in Spain. I mean in other geographies where we are, like Texas, right? Again, what we need is a place with a high solar resource, right, to make sure we can generate the energy at very competitive level. We need high spread between day and night prices, right? And that's the big question. Now in countries like Chile, if you have this spread around 60, numbers work, right? But the moment the batteries go further down that the spreads will also get reduced. So that's number two. You need a regulation for capacity payments or at least it helps, right? And this is what we have in Chile. There is something probably in California, right? And I think there's something going on in Texas as well coming up. And then we are expecting that in Spain. So capacity payments, spread, you have the LCOE that is low. And then -- so I think we might be able to replicate the same approach in some places. The approach for in the U.K. or in other markets might be very different. Right now, there are more merchant markets but you can get a payout in sometimes in 4, 5 years. So it's a completely different approach, but it's also something that we will work, and we will give you the information. Yes.

It's Henry Tarr from Berenberg. I guess an overarching question is as you look at these targets out to 2026, what's going to be the biggest barrier to hitting them? Is it grid connections? Is it signing the PPA? Is it permits by management? How do you see the highest hurdles?

Yes, it's difficult question, right, but I don't think the opportunities to secure PPAs based on PV and storage are going to be endless, right? So in my opinion that's going to be the biggest constraint, right? Right now, in Chile, there are no really ready-to-build projects even because for some reason, 4, 5 years ago, many of the projects of the developers stopped developing utility-scale projects because the country was saturated, but I think -- but I believe the PPAs -- and what we are also learning is that the cycles in storage are going to be shorter, right? Because you can develop or you can transform an existing PV plan in PVM base, sometimes -- normally in a matter of months because environmentally and socially, you have no big problems, no big constraints. And then you can build that plan in a year. So I think the cycles are going to be very quick. And this is something that is going to be very unique of this market. I'm not sure if you agree, Pablo?

Historically. So it's a different animal, and we chat before. And I think the other element is wire, right? With our wires, we have anything. So we need to get grid. What comes first, chicken or egg? That's always a debate. But action is important. We have to be ready and quickly to act and respond with the storage in existing assets and the ones to come and obviously use that learning exercise. I mean we're at least a year ahead of our competition with these new PPAs. That's quite unique, and we need to take advantage of this opportunity.

Sure. Question. When you look at asset sales, is the buyers' behavior changing? Obviously, we have higher -- you're still confident you're getting the 1.3, 1.4. Has the pool of buyers changed at all? Or have the questions they've been asking you changed over the last couple of years?

I think we've -- honestly, we were quite optimistic. I think there is over demand of projects, right? We have been able to get those returns on those margins in a difficult environment, right? Because the expectation of IRR of many insurance companies or pension funds has been higher than before. And still we have been able to secure this 1.4, 1.5, even 1.6 sometimes. So if the IRR expectation changes, right, I don't know, we can be anything, optimistic about the future. Market by market, we still see there's a very high demand of plants, and we've been a bit surprised of the results we have achieved. And I know our M&A team is doing a great job. But still, we are a bit surprised of the high valuations we are getting in the [indiscernible] project and still the deals we are doing. So yes, we remain quite optimistic.

[ Jorge Alonzo ] from Societe Generale. My question is on the procurement. Is the procurement already closed for the asset with PPAs? Or considering that the CapEx is coming down, is there an opportunity to increase the IRRs because the time lag on that? And on the procurement side as well on batteries, considering that suppliers are just couple of them, 2, 3 of them, how is the framework agreement? Or how is the situation there to be sure that you will be procured?

Okay. Okay, considering we have one supplier in the room. I need to -- okay. We are not -- we don't want to speculate really. I think it's -- this is something we've learned in the last 15, 16 years of procuring panels, right? Sometimes you get right, sometimes you get wrong. It's true that the trend is going down, but you don't want to be in a position that the price goes up, and you have a problem, right? So, so far, I think, correct me if I'm wrong, Carlos, we've secured -- or we are very close to secure the first part of -- the first phase of Quillagua. That's close, the conditions, right? And this should get delivered in 8, 9 months from us, the first half. And well, in fact, we're going to go in myself with Carlos and the rest of the team to China next week. So we're going to visit CATL, Narada, of course, BYD. And our idea is to secure the whole pack even if we don't get the lowest price if the price keeps going down. But I think we -- at one point, we need to secure our procurement and same as we hedge interest rate, hedging currencies and you really need to hedge your procurement. Keep in mind that your lithium is an important aspect, lithium ion, of the price. But I believe the supply and demand is the most important part of -- affecting the price of CapEx for storage. And we are just 20% of the market. The EV, the electric vehicle is like 70% of the market. So if there is, I don't know, subsidy for electric vehicles in China in Q1 next year, that might affect the price dramatically, right? We have already seen that, and you don't want to be in that position. So I think the sooner the better. When you sign the PPA, you really try to hedge your procurement. That's a golden rule we follow, and I think we're going to keep doing that.

Okay. We move then to the Q&A from the audience via streaming. And we have a couple of questions coming from Flora Trindade from CaixaBank BPI and [ Alessandro DiVito ] from Mediobanca. Both are asking about the estimated leverage levels by 2026.

Well, in that business plan, if you can see that rotation of assets, that investment, which should be something around 5.5, 6.5 rent total limit EBITDA. At the end, it's quite important when those projects start operating, we are considering that for 2026, main was Atacama part to be in operation.

The net debt to EBITDA that you mentioned is under the run rate EBITDA or the total EBITDA we have seen?

Total EBITDA.

Total EBITDA.

Okay. Also depend quite a lot about the rotation and how many millions is adding to the total EBITDA that if we are continuing with those sort of range targets of 350, 450, we should be close to EUR 300 million on total EBITDA.

Okay. The next question comes from Julia from Janus Henderson. She has 2 questions. The first one is what is our expectations for lithium prices in our CapEx plan? And the second question would be if U.S. elections might have an influence on our U.S. strategy.

Okay. I reply about the lithium-ion prices. I don't know, Carlos, I might need your help again. But the prices in yuan that was being consumed per kilo, and it has been going down. But still, I was a bit surprised when I found out that only about 30% of the price was really affected by lithium ion price from the total price. I honestly believe that supply -- the evolution of supply and demand is going to be the main factor, right, affecting. But again, we want to hedge our CapEx plan for Oasis of Atacama, except for Algarrobal, the moment we secured the PPA, we want to hedge the procurement, right?

And just to mention that in the business plan that we have presented, we have considered Oasis of Atacama assumption that we explained, $200,000 per megawatt hour. So if CapEx or lithium move down, that should be an upside.

And we are expecting right now this moment, we are expecting somehow a lower CapEx than that, maybe 10%, 15% down already.

And then the million-dollar question from [indiscernible], the what if. So I'm going to go a little bit around the edges, and you will see -- you will get it in a minute. So PTC and ITC, there's no loop. So PTC and ITC, these are the 2 main Federal support mechanisms, and they've been there for ages. So PTCs in the '90s, ITCs in the 2000s, actually was enacted in 2006. So it has gone through Democrats, Republicans, and it's an Act of Congress. It's an important thing. The IRA, which is a key question that may affect the deployment of renewals, actually, the transition of the whole U.S. towards a cleaner environment is an Act of Congress. It will require the Congress to change it. And what the IRA has done is to broaden the stakeholders. It directs you to invest in areas that needs investment. And often those areas are Republicans, they're Red States and has created a lot of jobs. So congressmen have a hard time to kill it. I just don't see it. So Trump coming into office, very possible. If we look at the polls. It's a real possibility. Congress killing the entire IRA, yes, I don't see that. Will they make changes? It's very possible. But will it be able to kill the whole industry? I don't see why. It's creating jobs. It's creating jobs in Republican states. It's an Act of Congress. I mean it doesn't make sense. So U.S. elections are going to be tricky. We will go through bit of bounce, but I don't see a change. The trend is there. It's a big train. I just don't see the factories shutting down because of the [indiscernible]. I mean if you're building products and people want your product and you're making money, why would you? So we don't anticipate a change in the administration, a change in the office, a diversion of our plants in the U.S.

Yes, the state with the most plants under construction is Texas, could be ready. I mean it's -- yes. So anyway, we are not saying that if Trump wins, this is good news, obviously. But we don't think it should change dramatically, right? At least that's...

I mean and it's not like the world is a very stable environment and not like [indiscernible], right? So we don't have to look very far out to see difficult situations. So let's just stick on our focus, which is developing projects in the right places.

There are no more from the audience via stream -- so just one last question from that.

It's [indiscernible] again. Two more questions, if that's okay. One of your peers has got a very substantial funding from EIB. I would assume Grenergy should be getting similar things. Can I ask, have you seen any obstacles getting funding from EIB? Will that be part of your future plan? So that's my question number one. Number two, if that's okay, about U.S. I look at Slide 15 to see that you plan to build 1.1 gigawatts by 2026. And then I look at the appendix, you only have about less than 200 megawatts of product, including the appendix before 2026. So I wonder where are the other 900 megawatts? I'm asking that because one of your peers again in kind of, French renewable, they were in the U.S. for the last 5, 6 years, but they decided to put out earlier this year. They saw the market being too competitive. So I just want to see where do you see the opportunities there.

Maybe I'll start with the U.S. and then we move to the ERBD financing. Yes, we show in 2 projects in advanced stage, but we're not showing the other 4.5 or similar, different stages of development. The U.S. is quite binary. You get degree, you get the PPA, you get the project. So at least in the stage where we are. We're not in California. In California, it will take us 6 to 8 years to develop a project. We're not in PGM. That's is closed for business. That will take us right now forever because it's closed. We are in the South, Southeast. We're in ERCOT, and we're in MISO. I mean I will argue the opposite. I don't see any other place in the world that today, if you want, you can start a gigawatt. If you have the money, you have -- you know you have the courage is the way to put it. You go to ERCOT, you put your cowboy hat, and you can start a gigawatt project tomorrow. Yes, you have to rally through, but there is no other market in the world. I bet anyone to tell me where you can find a gigawatt. I mean the U.S. is real. You have opportunities, whether it's the right opportunities or not, whether you have the right copper or not, you have the competence or not, that's a different story. But it's a true market. And we have 4 point -- I think it was 4.6 gigawatt right now in development. That was by the end of Q3. We will reach roughly 5 gigawatt, and we'll continue the growth. So as we enter into ERCOT, as we continue our expansion in the Southeast, that opportunities will arise. And we are not mentioning just because which out of these 54 opportunities are going to be the right one. Well, it's difficult to say. The other thing just with that, I will finish, our U.S. projects are not 20 megawatts or 5-megawatt or 50 megawatts. I mean this is not Italy. Here, if you don't have 300 mega, you're no one. So you get one project, and you've done 25%. You get 2 projects, you've done 60-plus percent. I mean here, the volume, the sheer scale is very impactful. So we don't need 5 hits. We need 3, 4.

Yes. . On your EIB question, we've been in touch with the European -- EIB, the European Investment Bank for many years. So we assessed financing with them. I think we reached truly competitive terms with international banks without the EIB. They said they've reviewed our pipeline extensively. So we've already passed several milestones of review. The Valkyria asset transaction is very specific. It's very short-term financing. These assets are going to move out of our balance sheet. So we didn't think it was the most appropriate portfolio to structure it with EIB. They said we're in touch with them. So we might announce a potential participation of EIB at some point in our financings for sure. I think the good news is they have a lot of appetite, and they're very, very active in Europe.

Well, if there are no further questions, we'll leave it here. Thank you very much for attending to the first part of our Capital Markets Day. And then we continue with our site visit [indiscernible].

Thank you.