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

So good morning, and welcome to Grenergy's 9 months 2024 Results Presentation. I'm Ruben Gomez, Head of Investor Relations. The presentation is going to be led by David Ruiz, our Executive Chairman; Daniel Lozano, our Chief of Strategy and Capital Markets Officer; and Rocio Fernandez, Head of Sustainability. They are going to take you through our business, financial and ESG review. And at the end of the presentation, there will be a Q&A session for sell-side analysts. Please, David, the floor is yours.

Thank you. Thank you very much, Ruben, and good morning, everyone. I think my first comment is we keep improving on the operational execution of the company. And we keep executing this process of transformation from being a purely PV company with maybe some wind assets to being primarily a PV and storage company, which is going through a profound transformation to hybridizing most of our pure stand-alone plants to PV BESS, right? The total platform amounted to 15.6 gigawatts and 25 gigawatts hour, right? That's solar PV platform remained almost flat versus the previous quarter. But the BESS hybrid increased plus 3.3 gigawatt hours, as we will see later in the following slide. As we will explain, we keep increasing our focus in hybrid BESS projects as we have done in Chile with Oasis of Atacama. I believe we are creating plenty of value converting the projects. In operation and under construction, we currently have 2.3 gigawatts of solar and 3.6 gigawatt hours of BESS is increasing in 0.3 gigawatts and 1.1 gigawatt hours versus the previous quarter. That's mainly due to the incorporation of Gabriela, that's Phase 4 of Oasis of Atacama, which is already under construction, and we are expecting the financial close very soon. If we did consider backlog plans, which we are planning to start in the next couple of weeks, we will get very close to the 3 gigawatt PV threshold and close to a record of 7 gigawatt hours of BESS. Regarding the performance of Oasis of Atacama, which you know is currently our flagship projects. We believe the execution is well on track. One fourth of the batteries for Quillagua for the first phase are already installed, and we expect to connect the remaining in the coming weeks, most of the batteries are already in the sea. It's also worth mentioning, and we will elaborate more on this that we have signed a new strategic agreement with CATL, with C-A-T-L is the world leader in BESS. And we have agreed with them the supply of batteries for Phase 4 of Oasis of Atacama. It's very important to remark that we are just working with the 2 largest players in BESS, at CATL and BYD. They are both blue chips with market caps around USD 100 million in the stock exchange. So they're definitely the largest players and blue chips in the universe of BESS. Financing for Phase 1 and 2 was closed in July 2024 for EUR 345 million. And before the year-end and in the remaining days of the year, we are expecting to close the financing for Phase 3 and 4, which is really on track and very advanced. Continuing to our financial highlights, I think Daniel will explain to you in more detail. Revenues amounted to EUR 278 million, that's 21% lower than last year. I think we use considering that Tabernas and José Cabrera and Daniel will elaborate more on this is reflected as inventories. If that deal would be reflected as revenues as well, then the real number or the real figure will be 16% up. And we are expecting a big acceleration of revenues and CapEx in Q4 when we report Q4. EBITDA was EUR 53 million versus EUR 102 million last year. This decline is mainly impacted and explained by the disposal of Belinchón that took place last year in I think Q2 last year, we didn't have any deal in the last of this size, in the last 12 months. So we have only reflected the disposal of our Peruvian assets for around EUR 20 million EBITDA in Q1. We will elaborate more. We are expecting new deals to be concluded even before the year-ends, right? Energy EBITDA also declined from EUR 41 million to EUR 30 million, mainly due to the high contribution that we had from Belinchón and Duna Huambos parks last year. So that's what explains this figure. Again, we are expecting our largest plant today, which is Quillagua, which is the first 2 phases of Oasis of Atacama as early as Q1 this year. And this will, I think the EBITDA will grow exponentially of EBITDA. CapEx reached EUR 419 million. It has increased significantly more than 60%. In the third quarter, CapEx amounted to EUR 233 million. That's including the acquisition to Repsol and Ibereólica for an amount of circa USD 130 million. To put things in perspective, the CapEx we have achieved so far this year is higher than the CapEx that we had together in 2021 and 2022. That's showing that we are really on track on the execution and is now showing the magnitude of the company we are becoming. And I believe CapEx invested would be our main KPI in the years to come. We will, of course, keep looking very closely at the figures of per megawatt, per megawatt hour, gigawatt hour, but connected or rotated. But I think our main KPI will be the quality of CapEx that we are investing and when we rotate assets, the revenues we make compared to the invested capital. As a result of this increase in CapEx, net debt reached EUR 975 million and debt EBITDA total ratio is now quite high and is 18x. And we're very confident that we will reduce this level in the coming months. As we have on the table, sizable asset opportunities. And again, several plants will get connected soon and the EBITDA will grow exponentially, both in build-to-sell and M&A deal. And just to finish this slide, the main ESG highlights that later will be explained by more detail by Rocio. Following, I'm very glad to mention that 100% of the targets committed for the third quarter of the year were successfully accomplished. No need to say, I mean since that, we are top ranked in ESG ratings in our industry. I believe we are very proud to say that we are the company in the universe in the space of renewable energy with the highest ESG ratings. I'm sure Rocio can give you more detail. And specifically, Morgan Stanley MSCI Index has recognized Grenergy as 1 of the 15 most sustainable worldwide companies in the utility sector for the third year in a row, which is something we are very proud of. Moving to just reviewing quite quickly the slides, and you know very well, the solar platform again reached 15.6 gigawatt almost of PV that's almost flat versus previous quarter. BESS capacity reached 25 gigawatt hour. That's been growing 3.3 as we continue to upgrade on storage hybridization, right? This increase was concentrated in LATAM and the U.S. But we will see sharp increases in this figure in the coming months since we are looking for similar opportunity Oasis of Atacama. We are really looking to see where the next Oasis of Atacama, next flagship projects will be for us and we believe there are fantastic opportunities for hybridization in the U.S. and in Spain, and there will be fantastic opportunities for stand-alone as well in Europe and in other geographies. I think we will give a lot more visibility in February when we disclose and give visibility on our 3-year plan for visibility in 2027. As you can see well, if close to 3 gigawatts, as I mentioned earlier on, 7 gigawatt hours of between backlog under construction identified opportunities. We are building right now more than 1.3 gigawatts of solar. That's really remarkable and 3.6 gigawatt hours of BESS. I think there are very few players, if any, which are currently building this amount of BESS in the world. As you can see on the right-hand side, I think we like to insist we have a very well-balanced portfolio in solar PV in our 3 main geographies. Regarding storage, well, LATAM stands out, thanks to our flagship project but we are working very hard in the other 2 regions, the U.S. and European because it's really our future. And we are working very hard in our new portfolio of stand-alone projects. Again, we'll give visibility very soon. And the industry, we like to insist is changing at an amazing speed. We really can't imagine stand-alone solar projects anymore, maybe except in some geographies like Peru or Colombia, they have a very strong presentation of hydro. Those are the only exceptions in all the other countries. And I think in the medium term, also in this in Peru and Colombia, all projects will be hybrid to some extent. Slide 5, we see in detail by geography and country our main pipeline at the different stages we mentioned before. We have an increment of BESS mainly in the U.S. and Chile, we are expecting start increases in Europe and the U.S. in the coming months in the colocation projects. I believe is where the company is creating more value and a very good example is Oasis of Atacama. On the other hand, it's true that our exposure in the short term is mainly to more major markets for us like Chile and Spain. But if you look at the stages of advanced development stage and identified opportunities, you can very clearly see that our efforts to diversify our pipeline and achieve in the medium, long term, a very well-balanced geographical diversification between the 3 regions where we are, LATAM, U.S. and Europe, right? On Slide 6, we show now we give a focus on Oasis of Atacama. We are more than happy to elaborate in the Q&A it's really our big thing now, right? Again, we believe there will be more flagship projects in the next few years coming from other regions. But right now, for us, Oasis of Atacama is a very transformational project. And we like to be very transparent and we like to inform very well of the milestones we are achieving, right? And I think if we move to the next slide, well, first, before we jump to the next slide, just to have the overall view considering we have now incorporated Elena Antofagasta Phases 6 and 7. This is coming from the assets we purchased to Ibereólica. Once we incorporate BESS, we might be talking about a total platform of 2 gigawatts of solar and very close to 11 gigawatt hours of BESS. I think these figures are quite impressive. And well, we are very advanced in the execution of the first 4 phases, and we will give very soon visibility on PPAs for the next few phases and new financing mandates and execution, right? Everything is happening at a very good speed and we are very, very happy with the execution. This slide, we've been trying to make an effort to explain all the relevant milestones we are achieving. We explained at the beginning of the year that we have closed the procurement of batteries in a very important agreement with BYD. I think it's the largest agreement BYD has ever signed for batteries, right, by far. And we signed with them, we believe they are the right partner for Phases 1 and 2. And indeed, we increased that agreement for Phase 3 later on in Q3 as we have been informed. We like to show this picture of this vessel because it's the first time that we are renting vessels for ourselves, right? And we are doing like a commuting service between China and Chile. And every time this vessel is taking like 140-150 containers, we are shipping per vessel 0.7 gigawatt hours in 1 single vessel, right? So I think it's quite impressive and we will be providing a lot more information on the execution of the plants, right? Concerning CATL, it's I think we also like to diversify. So we are not just working with BYD. So we have to work with CATL. We have been having very long time conversations with them and we think they are the perfect partner to diversify our supply of batteries, and we are working with the 2 leaders, right? Let's keep in mind that between CATL and BYD, they have like a 45% share of the global market of BESS. So we are talking about global leaders, and we really want to make sure we choose the right partners for our flagship projects. Concerning project finance, again, we announced the project finance of the first 2 phases. We are in very, very advanced and I think in the next couple of weeks, even days, we might announce the closing of Phases 4 and Phases 5, right, with the same banks. If we jump to the next slide, we can give visibility and we are very proud of what we are achieving here is by far the largest renewable energy project in Latin America, at least for sure, right? And we are bringing in 8 international banks. If you remember, we have mandate Natixis, Societe Generale from France, Scotia from Canada, SMBC from Japan for Phases 1 and 2. We're very close to achieve financial closing for Phases 3 and Phase 4. But it's very good news that in the first phase, there's been a syndication project process where we are bringing in international leaders like Bank of America, one of the first project finance they do, BBVA, one of the first project finance they do in Chile BBVA and Bank of China. So we have already 8 international lenders involved in the project financing of Oasis of Atacama and I think it's quite remarkable. So I think that's on my side. I turn the call to Daniel for the business review. Thank you very much.

Thank you, David. Moving on to the financial review, which starts on Slide 9. Total capacity increased to 950 megawatts with gross addition during the year of close to 500 megawatts. This includes Matarani solar PV asset built by us recently connected, Gran Teno, Tamango in Chile and Elena, thanks to the M&A transaction. Regarding production, we experienced a 3% decrease in total output. This decline was primarily due to the disposal of our Peruvian wind asset, Duna Huambos and our solar PV asset in Spain, [indiscernible]. However, at constant perimeter, we have experienced a slight growth. Load factor was also affected by the disposal of the Peruvian assets that are wind and they have higher load factor. Contracted volumes increased by 16% and represented 74% of our total electricity production. So we are really conservative regarding the volume we want to contract and this is the KPI that is showing that. Realized price decreased to EUR 44 per megawatt hour but we expect to recovery of merchant prices, both due to gas prices that is affecting to merchant prices. And as well, now we are introducing mission prices, but at night, much higher with batteries, of course. Additionally, on the right side, you will find a summary of the main financial KPIs that we will look into later. If you take a look at Slide 10, you will notice that in the 9-month period of 2024, total revenue reached EUR 278 million. Revenues declined by 21% year-on-year, but it will have increased by 16% if we had considered EUR 129 million of inventories as income from capitalized work. We are recording this as inventories because it is related to the pre-agreed sale of solar plants that are under construction. Regarding energy revenues, they will have grown 3% organically considering the projects we are connecting. Retail and services grew 27% and 34%, respectively. EBITDA for the 9-month period was EUR 53 million. Let's see a breakdown by division, Development and Construction division, mainly produced by the disposal of the Peruvian asset, EUR 20 million and the Bidwill of the M&A deal to Repsol and Ibereólica, EUR 18 million. This Bidwill has been considered because the real asset value in books compared with the transaction cost was higher. Bear in mind that in this deal amounted to USD 128 million, included 77 megawatts already in operation 1 gigawatt of line to the service station already energized with a ready-to-build portfolio or close to reach 1 gigawatt of solar PV and 6 gigawatt hour of storage. In Energy division, there was a decline versus previous year, as I said, because of the disposal of Duna Huambos and Belinchón asset. And finally, retail supply business in Chile and services achieved both together EUR 0.5 million in the first 9 months compared with minus EUR 0.8 million in previous year. Turning our attention to Slide 11. We see that total CapEx reached EUR 419 million, a higher amount compared to previous year, EUR 260 million, mainly explained by the increase in CapEx of the construction we are having, mainly Oasis of Atacama and the M&A deal we announced last quarter. As you can see in the chart, almost half of the amount invested belong to the project Oasis of Atacama, which considering the total amount since the beginning goes to EUR 272 million. The remaining amount of CapEx is invested mainly in project in Spain, 20% and other project in LATAM, 15%. An additional EUR 35 million was dedicated to development initiative to build the pipeline we are showing. On the right-hand side, we show the CapEx per megawatt in solar PV and per megawatt hour in BESS. We continue to see the CapEx deflation trend is still ongoing, but we are keeping the same estimates. In Slide 12, which provides insight into the cash flow for the period. Cash position at the end of September amounted to EUR 67 million versus EUR 121 million last December 2023. CapEx has primarily been self-funded through asset rotation and then the project financing, of course. As you can see in the right part of the chart, EUR 106 million correspond to the pending payment for the M&A deal with Repsol that will be done mainly in 2025. And we are very confident with the current cash position in addition with expected project financing to close and already signed M&A deals, Tabernas, José Cabrera and with many undrawn bank financing line, we have enough cash to self-fund CapEx plan for 2025. Now on Slide 13, our net debt increased to EUR 975 million, primarily due to the CapEx increase I've just explained. As a result, reported leverage ratio of net debt to EBITDA go to level of double digit. However, if we consider the asset rotation already agreed of José Cabrera and Tabernas, this ratio is coming is coming down to 3.3x in corporate. And this demonstrates how quickly this ratio can be reduced after an asset rotation. As David said, we are currently working in different possibilities. That's all for my side. Rocio is going to explain the main messages about ESG. Rocio?

Yes. Thank you, Daniel. Good morning, everyone. I invite you all to follow the details of the progress in ESG matters during the third quarter of 2024. I'm pleased to announce that the 4 goals committed for this period were successfully accomplished. Regarding the people dimension of the ESG road map, the equality, diversity and inclusion policy was elaborated and approved by the Board of Directors. Related to the supply chain dimension, an update of the procurement procedure was done and approved by the Board of Directors as well. Now it's important to mention that this procedure includes annex with a guidance to evaluate suppliers in terms of ESG before contracting. Speaking about the governance dimension, analysis according to the new sustainability reporting regulation requirements, the CCRT, was carried out to have into consideration the new list of KPIs to be reported in the sustainability report now in February 2025. Lastly, also in terms of governance, an update of the double materiality analysis was done to select the priorities of the company for the coming years in accordance with the new law CCRT. Now moving to the next slide. Regarding our position in ESG ratings, I would like to emphasize the fact that Grenergy consolidated its leadership position in the most prestigious ESG rating. During the third quarter of 2024, some score were updated, providing us better results than our peers and also in comparison with the last year. As David mentioned, it's important to highlight that, for example, MSCI recognized Energy as one of the 15 most sustainable worldwide companies in the utility sector and also S&P recognized us as the top 16%. So we are proud of all of that. That's all from my side. Thank you very much for your attention.

Thank you, Rocio. We are now moving to the Q&A session. [Operator Instructions] So first question comes from CaixaBank, please Flora go ahead.

I have 2. First one on asset rotation, you commented on potential deals before year-end. Can you please detail which assets are you negotiating? And also, what would be your central scenario for Oasis of Atacama if you would prefer to sell one of the phases or more phases or selling a minority stake in the project? And then secondly, just a detail on the covenants. Can you explain the mechanism this is assessed on a full year basis and whether you expect to stand below the covenant level by year-end?

Thanks very much Flora. Well, about the assets we currently have under negotiation, I understand we cannot give full details until we sign binding agreements. If you look at us every year, maybe with the exception of last year, where we concluded a pretty large transfer of Belinchón in Q2. But we normally tend to concentrate the M&A at the end of the year. So we currently have several options. There are assets that are very clear for rotation that's similar that we rotate let's say, older 1.0 assets in Peru. We are looking at opportunities for rotation in Colombia, where we have very attractive assets right now with the merchant prices are so high at the moment. So it's a fantastic opportunity for rotation. We have also very small assets right now in Argentina and Mexico. Those are also candidates for rotation. I think it's very clear that Oasis of Atacama has become a very big project. So especially after the incorporation of the assets we purchased from Brazil and [indiscernible], we already had in mind the possibility of transferring an interest of 49%. We are looking at all sort of opportunities. There is great interest in the market for these assets. I honestly believe these are the best assets in Chilean market right now, and very attractive returns. Well, we have plenty of opportunities for asset rotations, and we hope we can give news in the next few weeks. So that's basically so far. If you look at Spain, Ayora has always been a candidate for trust. Now we're executing the plan. We are about to close the project financing. Remember, this plan has the same PPA with Amazon as Tabernas and José Cabrera. But due to the extension of deadlines which the government made finally, it ended up having a delay of 3 quarters compared to the other projects. We are now executing closing project finance. Like every project worldwide, but especially in Spain, we still have Escuderos, we have Ayora, we have Clara Campaomor, and we are looking at opportunities to hybridate these projects. So we really feel that it might be better that we approach any M&A, new rotation will be after the hybridization. I think we have a fantastic example in Chile. We had opportunities for rotating Quillagua, but look at the new Quillagua now has 3x, 4x, more EBITDA than the previous Quillagua due to the incorporation of batteries and a second phase. So we are trying to create value from existing assets, and I don't think we will approach new M&A in Spain in the next few months until this process is concluded. That's about opportunities of rotation, which we have many options as you see. About the covenant and maybe Daniel can give you more visibility on this. It's really only affecting, I think, a 50%, EUR 52 million bond. It is now roughly 5% of our total debt, maybe 3% of our total balance. It's not really systemic. But anyway, I think Daniel can elaborate more on this.

Well, as David said, and you know with M&A deals, the leverage ratio will move down sharply. It happened last year just from Belinchón, remember, with that deal, we could move the corporate leverage ratio to 0.2x. So we're expecting, hopefully, to include those M&A deals and have the covenant. However, in case we want to be conservative, we could ask for a waiver to bondholders asking just for this redemption of this covenant for this year, explaining the M&A transaction we have in common.

So next question from Bank of America. Please Alexandre go ahead.

Quick one well actually a follow-up on the previous one and another one. I mean you mentioned hybridization in Spain as potentially being incremental to the value of your development projects. But I think for Spain and actually for many countries in Europe, we're seeing a lot of grid congestion in terms of request. Like how confident are you that you can actually deploy battery relatively fast to rotate those assets over the next few quarters or even a few years? And even beyond that, actually, which would be my second question, I remember you were quite bullish, I think, on Germany a few months back out of the Intersolar conference. I was myself at a battery conference a few weeks back and everyone was quoting Germany at the next or most hot market in Europe for batteries as well, like 50% of the audience. So are you still very positive about Germany? Do you feel we're still waiting for regulation in that market specifically and in Spain as well? Or would you be actually looking at accelerating your pipeline in those geographies as we've seen other of your peers starting to deploy BESS at the moment?

Thanks very much for your questions. Well, about congestion, hybridization in Spain, well, sometimes hybridization is the answer to congestion and curtailment. If you have an existing plant and you convert that plant into let's say, a different animal that investing in. That's basically what we did in Oasis of Atacama. I think Spain and other sunny places like Texas is a perfect example, maybe the Southeast in the U.S. and many other areas. Well, the hybrid plants are booming in Chile and in Australia for a reason, right? And they have a very good radiation. They have normally a capacity mechanism in place for remuneration of capacity, right? That's not the case yet in Spain, but it will eventually happen. But with the current reduction of CapEx, even with the current market for trading for the day-ahead market, the secondary and tertiary markets, I think numbers work pretty well in Spain for hybridization. We are having conversations in our case, we have an existing 200-megawatt plant. That's already the permitting is ready. We even got subsidy for next-generation funds that I don't think it's a game-changer, right? It's just an upside. And if there is ever a capacity auction that has been announced many times, we believe that now with the new ministry has just announced that maybe in January or February will take place. But we see this as an upside. I mean without the capacity mechanism, I think numbers work pretty well in Spain for hybrid plants. And we are already having this conversation with the offtakers, right? Okay, we are delivering new energy during the day. But if we install batteries, there is a chance we move part of these hours at the peak, right? So that's obviously a very different price. And I think this conversation is the same conversation we started with some offtakers in Chile quite successfully 2 years ago, and we are having the same process in Spain and the CapEx of batteries is helping a lot, right? This is Spain. So in Spain, we are doing the same exercise for Escuderos maybe for Ayora, we are still executing obviously a purely solar plant, and this is the PPA we have with Amazon. But eventually, there are opportunities for hybridization. And from now on, every single project in Spain with PV will be a hybrid project. We're very sure about that. Going to stand-alone, and again, we will give a lot of visibility on our stand-alone strategy in Europe. I think we are building one of the most attractive portfolios of stand-alone projects in the countries where we are, but mainly U.K., Germany, Italy, and Spain. And Germany is, in my opinion, I agree, the most attractive market. If you ask me, well, I was last week well the week before in Berlin for a few days, I spent more time after Madrid and Santo Chile, the third city that I visit more in office is Berlin, and that's for a reason, right? And we believe there's a fantastic opportunity for BESS. And again, there is a capacity market expected. But even without that market, I think numbers for trading work very well. The approach is different. We believe more in stand-alone projects in Germany. We're building our portfolio, and we are looking at buy-side opportunities also from local developers. But if you ask me now, where would I think that our next Oasis of Atacama will be, today, I will say, yes, I think there is a fantastic opportunity even bigger in Germany for stand-alone projects. That's very clear on my side. And I think the hyperscalers are already understanding that they need plenty of storage for the data centers, right? That's very clear, yes. So that's about hybridization. And yes, I'm very bullish on Germany.

Okay. Next question from Berenberg, Henry.

Two really. One is just on CapEx. Could you please update us on what you expect for CapEx through Q4 and then maybe into 2025? And then just on the longer-dated EBITDA targets that I think you laid out 6 months ago, are they still in place? And when might you come back to update those? Is that sort of a full year conversation? Thank you.

Well, I will introduce and maybe Daniel can complement my comments, right? But about CapEx, we gave like a 3-year CapEx guidance, right? Daniel, correct me if I'm wrong, it's EUR 2.6 billion from 2023 to 2026. I think we are well on track. There is an acceleration process. You will see that process in Q4 since we are now executing Phases 1 Oasis of Atacama and we are in the early stage of Phase 3 and Phase 4. But I think in Q1, we will be fully executing Phase 3, Phase 4 at the same time. So there will be an exponential growth of CapEx. There will be also the debt associated to this CapEx, which we are raising from nonrecourse project finance. I don't think we give guidance on particular years for 2025, but we can say we are really on track for this target. When we purchased the developments in Northern Chile, we saw as an opportunity to benefit from the lower CapEx we deliver more projects with higher return and there are some projects in mainly the European Union and the U.S. that we see them more in 2027 than 2026. So I think Daniel can explain this better than me. But basically, we stick to the same targets of 2.6 billion, roughly means that 2025, 2026, we will not be very far from EUR 1 billion per year, right, on CapEx. About EBITDA, I think we published a guidance a year ago, right, in the Capital Markets Day in November we stick to this guidance. We will update this guidance for 2026, and we will include our expectations for 2027, right? But we remain on track. We might be optimistic on the guidance since some of CapEx, there's been a strong CapEx reduction in some of the projects. It means more EBITDA and more IRR, right? So there will be a reflection. But I think we will update and give guidance in early in February, right, we will also see visibility in 2027, and we will update our guidance for 2026. Daniel?

Exactly. Well, regarding CapEx, we will continue executing in this Q4 an important amount of CapEx that is the capacity we have, but we stick to those EUR 2.6 million CapEx investment that we updated or we didn't update, I would say, after the purchase from Repsol and Ibereólica. And as David said, we are working on some deals and PPAs and everything is better to give an update on target early next year.

Next question from Kempen, Paul.

Well, you don't provide guidance for the year. I think currently [indiscernible] considering you reported EUR 53 million in 9 months and you talked about next rotation probably in Q4 that EUR 100 million didn't look realistic. And maybe just another question on the financing of Phases 3 and 4. If I recall correctly, in September, you were still hoping to close that by the end of November. So it seems that it's taking just a little bit more time than expected. Is there any particular reason for that? And if not, are you just very confident that it can be closed before the end of the year?

Replying first your second question, we have absolutely full confidence that the closings will be achieved before the end of the year. We're talking about in a matter of days, in fact, right? So I think all the risk committees of the 5 banks have already approved the deal. And I think we might inform as early as next week about the closing of Phase 4 and the week after or even the last week of the year for Phase 4. So we're absolutely confident on that, right? About the other question, there was a lot of noise. I didn't hear very well, but it was more about the EBITDA. Maybe, Daniel, you hear that properly.

Yes. Maybe I can help you on this. Well, at the end, Paul, you know that we have 2 main EBITDA sources that is build-to-own our own portfolio, energy sales and build-to-sell the M&A deal. We include Energy EBITDA more or less consensus should be right in the sense that you have a lot of information to build that EBITDA for the year-end. Then, depending on the M&A deals we can include before the year-end, the figure will be above or below consensus. Hopefully, we can include and the EBITDA should improve.

So next question from Anis from ODDO.

I have 2 questions. First one on the merchant price level over the 9 months, which was particularly low at EUR 18.8 in the 9 months '24 compared to EUR 55 for 9 months '23. I'm just asking, was this only linked to the sharp drop in merchant price in Spain during half 1? Or is it also linked to the drop in merchant price as well? And is this expected to be better in Q4 with the increase in merchant price in Spain? And my second question is on the U.S. Would you change your development strategy in the U.S. after term production? I mean probably considering delaying investments until it's clear in terms of IRA and in terms of solar panel tax.

Starting with the last question about the U.S. I think, yes, I appreciate this question because, for us, the U.S. has to be our largest market as early as 2027, right? We are, I think, step by step, but I think we are developing a very consistent strategy, right, focusing in 2 major areas on the Southeast, which is a regulated market and on Texas ERCOT, which is a non-regulated market. Texas reminds us a lot about Chile, and we feel very comfortable in Chile, as you know. And some people say this is the Wild West, but we feel very, very happy working there. We see the same problems and opportunities as we see in Chile, there are containments. There are no differences that you can approach the hyperscalers on the offtakers directly and you can make it happen, right? So I think it will be a fantastic market for us. Then we have the Southeast, where it's a regulated market. You have to go through the RFQs of the local southern companies, right? You're talking about Duke Energy, Georgia Power, Mississippi Power, TVA. We have great relationships with them. And what is going on in the U.S. is pretty unbelievable. I mean they were launching RFQs for processes to grant PPAs once a year, and now they're launching processes twice or even every quarter, right? So because the demand they have from data centers, it is unbelievable. So that's -- I think with any administration in any scenario, the U.S. needs a lot of energy right here right now, and I think PV and BESS is the only way. There might be an increase in gas as well, but I believe that the opportunity for solar and BESS is fantastic. But you're right, we don't know the rules, right? So we need to wait now a few months, I would say half a year at least, to see how the new administration, what changes they make to the current status of the IRA and what changes are made if there is a trade war, which is very clearly that there is, how this would affect the panels, not for solar panels because solar panels are made in the U.S. That's for sure, right? And we are already considering made in the U.S. panels, right, which are 3x, even 4x more expensive than Chinese ones. But regarding BESS, the batteries is not that clear, right? So we don't know whether we are able to import batteries from China or not, and that affects dramatically the CapEx and it's very difficult to close a PPA with batteries if you don't know the rules about whether you will be able to import batteries from China, from the Southeast or you need to look at the supply chain from the U.S. that currently is not really existent. So that's, I think, the most tricky point about the U.S. And about merchant prices, well, in our case, considering we have plans in the first 9 months, our main exposure was mainly coming from Quillagua plant in Northern Chile, that prices were close to 0, but we are now converting that plant, as you know, to a very different animal. And also in Spain, which had very low prices during the second and part of the third quarter, right? So that's mainly. Now Spain is having very high prices and in Chile, we plug off our plant in Chile because we are installing the batteries, and we will plug in in January.

Next question from Naisheng Cui, Barclays.

I have 2 questions, if that's okay. The first one is on disposal of your asset rotation strategy. I'm literally looking at your CMD presentation from last year, and I can see the midpoint of disposal is around 400 megawatts per year from '23 to '26. So that is 1.6 gigawatts in 4 years, but it feels like we are slightly behind the schedule in the middle of the 4-year plan. And I wonder whether you are still on track to achieve that overall during the 4 years. And am I right that when you present the plan last year, that actually excludes Atacama. So that's my first question on disposal. Then my second question is on Atacama Phase 1. Just wonder from a modeling perspective, I understand you will finish all the mechanical work by the end of this month. But do we expect a ramp-up for the whole project next year? Or do we expect next year, it will be up and running 100%?

Thanks for your questions. Replying your first question about asset rotation. I believe correct me, Daniel, if I'm wrong, but we gave a guidance of 400 megawatts per year for 4 years. So that makes 1.6. That's right. I think the most relevant guidance is actually the proceeds we make rotation, right? And we gave a guidance of EUR 600 million, right? And I think that's the key point, right? Because initially in Spain, we were about to rotate 0.9% of roughly 1 gigawatt. We ended up rotating Belinchón, José Cabrera and Tabernas, that's EUR 300 million, that's EUR 470 million, but we rotate 100% of those assets, and we made more proceeds than we expected with the whole 49. So that's just an example. I think we made great rotations in Peru that some of them were unexpected, and we kept rotating PMGDs. I think that was last year. So far, we have achieved EUR 350 million out of the EUR 600 million that we expected for the period of 4 years, we still have 2 years to go on 1 month, right? I think in the next few weeks, we will have more visibility on some of the rotations. And I believe we are really on track. That's my point of view. And even we will be above expectations. But obviously, until you don't sign a deal, that's not a deal signed. So we need to wait a little bit. But I think I would focus more on – we are coming from years in which the main KPI were megawatts or gigawatts of solar, wind. Now we have introduced the gigawatt hour. We are making more value out of gigawatt hours than gigawatts of solar, right? But what we really care about is about billions of millions of CapEx that we are investing. And when we make rotations, what are really our proceeds and how profitable are our rotations, right? So I think we will try to focus in our next guidance on these KPIs because I believe it's really what matters. And I think the KPIs of our industry are changing, right, and moving from megawatts of solar to megawatt hours of BES, and we are making a lot more value out of the BES than solar or solar and BESS combined. So that's, I think, something we are changing, right? Your second question was about Oasis of Atacama I think everything is fine. I have to say we are very happy about the execution. We are having no delays at all. I have to say, in solar, normally, we were facing some delays from time to time due to permitting. In BESS, permitting is more straightforward because so far, we're normally converting now existing developments of PV into BESS. So you don't get delays in the permitting process because everything is very straightforward. So that's one thing. And also the delivery of BESS, at least BYD, we still have not started the deliveries from CATL but for BYD, it's working really well. And yes, we believe for Phase 1, that remember is 100 megawatt which is 0.7 that will be completely executed at the end of this month, this year, mechanical completion, and we are planning to show some revenues in Q1, maybe as early as February, March. The COD of the plant will take place in Q2. This is Phase 1. Phase 2, it's 2 months behind. I mean we are considering this as a single project, but we will plug in first the first phase, and we will plug in the second phase as early as Q2, right? So that's fine. And then I think Victor Jara and Gabriela Phases 3 and 4, they are already under construction. Everything is done by ourselves. A long time ago, we purchase from Siemens, the [indiscernible] we need that is longer. So it's now very straightforward execution. We are talking about 10 months of execution, right? We're basically concluding Quillagua. We are moving most of the teams to Victor Jara and Gabriela. It's pretty challenging, but the plants are really in the same area. So we are treating everything as a single project. So I think we can optimize a lot our construction team. So we really have no concerns about the execution so far.

So next question is from Santander, Eduardo.

Just a follow-up question on the asset rotation. You mentioned previously Colombia, Argentina, Mexico. What about the PMGDs Chile to be on the table or...

Yes, totally. I simply forgot. But yes, there are obvious candidates for asset rotation, right? As you know, some of you know, there were some noise about a potential regulatory change. I think finally, this concern is over, right? It will be fully clarified this week. We never really thought that this would happen, but for some weeks, there were some concerns and a lot of M&A and financing deals were kind of on hold. But we believe we've done a fantastic job with PMGDs in Chile. We closed the first financing of PNGDs. We were the first ones using the stabilized price, the first 3, 4 financing closes in the country. We have executed roughly 30% of the 3,000 megawatts that are existing in the country. We've made more than 9 deals. But I think that part is kind of over, right? We still have a remaining portfolio of roughly 200 megawatts, 150 have been financed by Natixis, and the other 50 we are currently building them. It's a very attractive portfolio and it's a fantastic possibility for an asset rotation. And yes, we are receiving some indications.

Next question from Jorge from JB Capital.

One question. It's a follow-up on the asset rotation. From your words, David, I assume that you are going to sell one of the stages of Oasis of Atacama and whatever you need to reach the leverage objectives. What would you -- taking your last answer, can I assume that selling the PMGDs in Chile would be a plan B if you don't close the Oasis of Atacama? Or would you go for PMGDs and Oasis? Could you go beyond your needs to respect the leverage? Or are we just going to sell what you need to comply with the 3.5x net debt to EBITDA?

Thank you, the menu, we have a very big menu right now. And I think we have plenty of possibilities, right? I think we always try to do what we believe is best for the company and the shareholders. I'm the first shareholder, right? So we try to create as much value as possible, right? I think as I replied to the previous question, the PMGDs, we believe that, that wave is kind of over for us. So that's very clear asset rotation. The valuations are very attractive for PMGDs, right? And what internally we call them PMGDs as well in Colombia. We've CATL 6, 7. We have CATL 13. The valuation of each portfolio is like 200 and 150. So we can rotate those portfolios in Colombia and Chile, and it will be right, it will be enough. But we've been exploring as well some potential farming downs of Oasis of Atacama, but it could be like 49% or we are receiving indications for 100%. Let's see. I think considering we purchase 1 gigawatt in Chile, and we will very soon announce PPAs for that, we might mandate the banks. I think we are more open to farm down 100% of 1 particular phase of Oasis of Atacama, but that's not the only -- I mean, we have got several choices. Let's clarify that the only, let's say, concern we might have now is about the ratios. It's not about the cash at all, right? I mean, with the project finance we are getting and the asset rotations we have already closed, consider that in a few months from now, we'll make a very important transfer to Allianz of some Spanish assets. We are more than comfortable with our equity needs, right, for 2026, but for 2025. But if we see an opportunity in accelerating the asset rotation of some places of Oasis of Atacama. I think we will redo that. I think we will increase, we will go beyond those figures of EUR 600 million of proceeds that we were estimating. We will be executing long before the expected 4 years. So it will be an opportunity for accelerating our business plan and reinvesting those proceeds in other regions, mainly Europe in BESS and hybrid in Spain and the U.S. But again, Jorge, we will give visibility whenever we can, we are working very hard. And I think we have always delivered the M&A on time. So we are very confident.

Okay. So there are no more questions from sell-side analysts under our coverage. So thank you very much for attending this call. Let's see you on our full year 2024 results. Thank you very much.

Thank you. Have a good day.

Thank you. Bye.