Good morning, everyone. I'm Alberto Sánchez, 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 is 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 three 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, Rocío Fernández, Head of Sustainability, will present our new ESG roadmap 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.
In 2007, when we started our journey, everybody thought we were some kind of crazy visionaries of a world that would never come to be. And now? Now we have undeniable proof that shows how that vision has materialized. Yes, renewable energies have been growing ever since to become highly competitive and absolutely indispensable in today's world. But not only were we visionaries, but also quite ambitious ones. We pushed forward our ideas to new markets to become multi-regional player. As a result, we already make business in more than 10 countries across Europe and America, with a solid and integrated business model. We don't want to be one of those who boast about their work, but the truth is, we love what we do, and we put all our energy into it.
That's why we love implementing renewable energy projects from end to end: development, financial, structuring, construction, operation, and maintenance. Our love is as big and impressive as our figures. With our own EPC, we have executed over 100 projects, optimizing asset management to achieve a proper balance between asset rotation and portfolio operation, making us market leaders. But why do we do all that? Well, it's our business. We firmly believe in what we do, and we have built a strong structure of specialists in all areas and regions, making us highly competitive and effective. Today, we employ more than 500 people, and there's something else. We really believe that our sustainability is the one and only way to preserve our planet and our common way of life. As renewable energies are one of the biggest pillars, we want to become leaders of this sustainable transition.
Even having this nice chat here, we've been producing energy, unstoppable, flying higher and higher, because for us, only sky is the limit.
Good, 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. This is 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 Mercado Continuo four 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 it's 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 target. We would like to update our, I believe, our very impressive ESG roadmap. Yeah. Rocío will do it.
We're very proud of our achievements, and 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 for incorporating new talent. Well, I mentioned Rocío, right? She's been working with us for a few months now. And also Pablo Otín. I don't know where you are, Pablo. Yeah. 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. 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, BESS, 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 could say more than two 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, 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 an another slide. We currently have 15.5 GW, this is 15,500 MW, under development, 10.7 GWh of storage. 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 GW of solar under construction. We already have launched the procurement for our first storage project in Chile. This is 0.5 GWh, and we also have a very active services division doing operation and maintenance, and asset management, right? We are a geographically diversified company.
We, you know, we started up in Spain, then we moved to Latin America, but we are currently in three 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 TWh per year. This is 2 GW 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. That's very important because it's the very first PPA we signed, delivery the energy at night, and that's gonna make a huge difference in the future, right? We have now more than 3 gigawatts in advanced negotiation in the three regions where we are. Talking about that 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 closed or mandate already $1.9 billion with, during all these years. We have rotated. We are a very active M&A company. We have rotate already 1.9 gigawatts of assets, right?
Talking about BESS, we, about BESS, we are first mover. We are becoming a, a PV-- We are already a PV and BESS company. Before we were a PV company, a solar company, doing a little bit of wind, but we are definitely moving from being that to being a pure PV and BESS. And this BESS could be... Pablo will give you a lot more information, but it could be standalone or it could be co-location with, with solar. Okay. Moving to, to this slide, well, let's... We, we, we, we really like this slide, considering we created this company from scratch back in 2007. Those were the early days for, for solar in, in Spain. You know, 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 or the subsidies came to an end. Like, like many other companies, we had to go overseas, and in our case, we moved to Chile. That's back in 2012. I think we collected our last feed-in tariff plans 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, 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, a total portfolio, okay?
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 gonna be four years from now, next month. And, well, at that time, we already had a portfolio of 4 gigawatts. We were a company of 114-120 employees, EUR 39 million equity, and EUR 21 million EBITDA. And this is where we are now. So we are in 3 regions, 15.5 gigawatts portfolios. We are close to, I think, more than 500 employees now, as we speak this month.
Equity of EUR 400, EBITDA above EUR 100, just for the first 9 months, which is what we just published, and a total, a market cap of EUR 800. So if you look at the figures, we've multiplied by, I think, 40, 40, 45 times the portfolio. We've multiplied by 25 the number of employees, multiplied by 40 the equity, we've multiplied by 25 the EBITDA, and, our market cap, we multiplied by 20. So it gives you an idea of where we are on 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, operational 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. Gives us a lot of flexibility to the deliveries. I mean, we can sometimes start buying modules 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, big capacity of construction.
The company has now, as I mentioned, 1 GW under construction, 0.5 GWh of our first storage plant. 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, and in different segments. I mean, we are ready to build clusters of distribution projects of 10 MW, 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, Tabernas 300, the one we are just connecting in right now, in Chile, Gran Teno. So well, we are basically getting ready to be an even larger construction company, in as early as 2025. We're planning to have close to 2 GW 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, operational maintenance and asset management.
Every kilowatt hour really counts, and, again, running the plants well and making sure everything runs smoothly, it's, it's definitely better, and also getting the lowest, possible, cost. Yeah. 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 among the best in the industry. This is our regional presence, our global presence, right? We are now in, we are now in three regions. We have three 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 a 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 gonna have in our balance sheet are gonna be in Chile, right? 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 past four, five years, so we believe it's the right market to be, if you want to have the right stuff two years from now, right? Moving to the left, to the left-hand side of the slide, well, that's the very famous inverted pyramid that we use. It's very important today, because this is where we are now. We have close to 2 gigawatts between the operation and under construction. This is only solar, yeah? 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. Look at what we have coming up for 2025, 1.8, and more importantly, right?
I know right now, the market, the markets are not giving a lot of value to our long-term pipeline, but for us, it's extremely important, this part of the pyramid, right? The top part of the pyramid. So we have we are giving visibility on, the markets where we are, and 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 market, and again, Pablo will give you a lot of information. Yeah. PPAs. PPAs is where we were born, we were there were feed-in tariffs. Then, we had plenty of options, and we were quite successful in auctions in Latin America.
But now, PPAs, you know, our business is really about getting the right PPAs, matching those PPAs with projects, right? And 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, for the first time, selling directly to corporates. We announced, we cannot really say the name, but a very large US corporate, right? A very one of the largest PV PPAs they've ever closed.
And we have closed another one with LyondellBasell , which is, we believe, a fantastic off-taker. 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 US. We hope we can announce the first PPAs in the US. We are working in PPAs with large US corporates in all the three regions, and we're 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.
So this is one of them, and the rest will be merchant. So we are following this 20%, 80% strategy. Going to financing, right? And, and Emi will give you also a lot more information in the presentation. But also, we're very proud of what we are achieving. Look, look what we have secured so far. Look what we just mandated, right? Well, this plant, this is to for the construction needs for our plants in the Valkyria project, right? We just mandate as 3 banks. And, well, our largest project today, that we will give you, Oasis de Atacama. I think most of the lenders are gonna be here. We really appreciate your support.
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 no plans for capital increase in the next, at least for the next two 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 as green in March, and with a yield of 4.75%, and a second issuance of EUR 52 million in 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 our DNA. 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 MWs. This is the MWs we rotate in 2021, 108 MW, 2022, 209 MW, 2023, close to 500 MW, 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 GW.
We've made EUR 0.9 billion of proceeds, right? This means EUR 355 million capital gains. More importantly, 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. It means we are creating a lot of value, and we are really financing our growth, and we believe this is a fantastic, there 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 co-location and standalone.
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 standalone and in co-location. Pablo, again, will give you a lot more info. Okay. Well, the big news is we are introducing today our flagship project for storage in Chile, in Atacama. We've called it Oasis de Atacama. Well, the good news is that already we have officially the first phase under construction, under procurement, right, at least. Moving to our strategic targets, right? 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 four. Capacity, right, I think we are reflecting here gross and net. This is considering that we are expecting some rotations to take place. We state here between 350 and 450 per year, right? If you check what we have achieved in the, in Valkyria, we have already transferred close to 300 to Allianz, right? So this is 2025. We have- We're gonna give very soon a lot of visibility on our transfer for 2024. 2023, we have already transferred, as you know, Belinchón, some 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 close or very or we will announce very, very soon, yeah? 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 one third of our CapEx will be coming from storage. This is purely batteries, right? So it's completely 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 standalone 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, "Oh, that's extremely ambitious," but really, when we moved to the main market, we were below 20. Remember, we promised that we would reach more than 100 as early as 2024. We have achieved that in 2023. 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 I'm... Hopefully, I can transfer the energy that we're gonna be seeing over the next slides to all of you, 'cause the opportunity is very significant. Over the next 20 minutes or so, I will try not to be too, you know, too expansive. I will be describing the new markets as well as the traditional markets, our thought process, our thinking, our view, and what we do and what we're doing. You will see I will be doing this gesture quite a bit, because we're gonna continue with the theme of three.
We have three regions, we have three platforms, and we have three areas within this within our business. So we're gonna start with the regions. So we have LatAm, Latin America, we have Europe, and we have the U.S. LatAm represents the past and represents a story 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 other companies, 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 2018 with projects in Spain. And as, you know, we see the success over the last years, but what you might 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 Spain, but as in another five countries in Europe. And then we have the U.S. The U.S. is the big one, is the big piece, is the big opportunity, and is the one that is gonna 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 on to pay attention to the slide, LatAm 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 brief in the previous slides, our goal is to have a balanced portfolio. You need three legs to the stool, and our three legs are LatAm, Europe, and the U.S. And right now, we have a balanced portfolio, a balanced pipeline. So if you look at the numbers, roughly 5 gigawatts, 5 gigawatts, and 5 gigawatts in the three 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 for Europe and the U.S. over the next years to come to these ratios of 40% of operational or under construction projects in LatAm, versus 30% in Europe and versus 30% in the U.S. So let's move now into the platforms. So the LatAm 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 four countries in the region. If we looked at the top left table, you can see that roughly we have three different, the three different environments.
So we have Mexico on one end, it's a large market, it's 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 Mexican needs electricity, and your shortage is there. It's a reality, they need power, and we're preparing for that. We're not rushing, we're not, you know, rushing into, you know, firefighters yet. We don't run into the fire, but we certainly are preparing for what is coming, and it's coming soon. Then, we have two 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, it's 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 not 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 hot market, and one would argue, is the first, and certainly is the largest market away. That's out of question. We employ over 100 people in Chile, and it's 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 diverse economy, and you have plenty of regulatory stability and transparency. It's more European than probably many European countries when, when we talk about the grid.
An important element as well is Chile is the laboratory of what is gonna happen in many other countries in the future. What we see in Chile today is what we're seeing in Spain, in the U.S., and elsewhere in Europe in 3-4 years, and only that makes sense. Why? Because Chile is been always at the forefront. You see here in the slide, the penetration of solar in Chile is higher than California. Well, in Atacama, it's higher than California. And why so? Because Chile combines the highest resource in the world with a very stable framework. It's not surprised that the first project that were PPA subsidies free, or what you call at the time, PPA solar, happened in the Atacama Desert. 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 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're giving that solution in the form, in PPAs or night solar, which is some unique concept that we're exploring, and that we're hoping 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 LatAm 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 the 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're 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 adapting it constantly to be at the forefront and not make mistakes.
In terms of, as David mentioned, in terms of asset rotation and long term, well, we will rotate assets, what we call build to sell, in the entire fleet, 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 GW, we will have over 4-5 GW by the end of the year, 5.5. It will reach 6-6.5 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 cone, so you know, 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 gonna come as 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 gonna be able to give you, you know, any great discovery. It's certainly not my intention. But one thing I'm gonna 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 another 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, company started in Italy, and then in the UK, and then in Poland, and then Germany and Romania.
Right now, we have eight 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, you know, just focusing daily in developing projects. That is gonna bring significant growth over time. We're not making announcements, we're just talking about realities. We have divided this European platform in three segments, we call conferences, like in the U.S. So we have the Southern, the Central, and the East. So Southern includes our two 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 Solar Power Europe long-term projections for 2027, and they're quite the same, you know.
We look at 74 and, well, 28, and then the PDA, which is the one that probably gives a better reference, 76 and 80. By the end of the decade, both countries will be in similar level of deployment, but there's one very different situation among the two—between the two 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. In Italy, our hope is to move into, you know, construction mode by next year. Similarly, but not quite the same.
That is not necessarily bad news, because we're gonna be able to transfer all of our experience, all of our teams, from one country to the next, as, you know, as there is a lot of similarities between the two countries. Let's look now at what we call the central conference, Germany and the UK. Very competitive, very mature, and very different environments. Let's start first with the UK. We moved into the UK in 2020, and we're basically chasing how the market has evolved. First, UK 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 referent, is the mirror in which every country is looking at in terms of the storage. The U.K. is years ahead of anywhere else, whether it's two, three, or four, 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 while it's a laboratory, it's not a small one. 50 GW of BESS by 2030. That's the national goal. That equals roughly GBP 40 billion of investment in the next seven years. It's real money. And again, it makes sense. The U.K. has decided to funnel their 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 in 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 GW plus 150 GW by 2030. So right now, they're about 70. But in the years to come, this is a long-term 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 two 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 market is constructed, that we'll see a significant rise in the next years. So Germany is all about growing. We reported our first projects in Q2, we'll continue on 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 bolder now that we're starting Romania. But again, it makes sense. If you looked at their penetration levels, they're really low. There's so much ahead, so much opportunity ahead of us, yet maybe we're not talking about gigawatts, but certainly we're talking about decent volumes. And they have exactly the same obligations that we have in Germany, or we have in Italy, or 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 UK. With that, with a bit of luck, 'cause with the new government, we have no signs of that stopping anytime soon. Quite to the contrary, new government is pro-renewables, and it wants to advance the decarbonization of the industry. And more importantly, and this is my opinion, we've done what is by far the most important thing for any 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 12 people, in Romania. So very proud of how we're doing on that front. With that, I wanna mention one general concept that applies to the entire regions, to the entire platforms. I mean, what we do is not incredibly complicated. We don't do nuclear power, we don't do, you know, AI. What we do is development. You know, development has three things: you need land, you have grid, and you have a PPA. Yeah, 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 hired over 100 people in development in the different markets, both in the traditional markets and in the new markets.
You know, you can make any announcement you want, at the end of the day, you don't have the people, that's not gonna go anywhere. We have that, we have them. That's gonna be the biggest differentiator over time. We might not see them today, we might not see them tomorrow, but in three years' time, we will see how all these teams pay off. We're particularly proud of being able to attract talent that is committed, share the same visions, and the same values that we have. It's not an easy, 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. That's just, it's out of the question.
David, you know, just make the right call at the right time. When we bought the minority interest in Sofos Harbert in 2021, we knew what everything that was coming. We knew that something will coming, and I will talk about it, but a lot has come in the last year in the US. 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, you know, quite a few things, first, integrate them. There was a bunch of people. I talk 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 grow, excuse me. We helped them to move forward, to become something that is more than just the South, but something that is the Southeast first, and then we did a bit of MISO South, and now it's Texas. Right now, we have a very strong portfolio, and we have capabilities all across, you know, the central part of the U.S. Just give you a sense, we're covering landmass, about 40% of the states, about 40% of the U.S. And the three ISOs, Midwest, Texas, and Southeast, represent 40% of the stock capacity and 30% of the demand. So we're talking about big, big, big figures. We're not covering everywhere. Certainly, we're not in California or not in PJM, but still, big numbers.
To give you a sense of what we're talking about, MISO, Texas and Southeast is gonna add altogether about 150 gigawatt between now and 2030. That is pretty much the same that we talk about Germany, the fourth economy in the world, and this year is gonna become the third. We're not talking about the entire U.S., we're just talking about these three markets. 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? The answer 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. comes 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 gonna take a minute, but I hope you follow me, and I hope I'm not too boring. It's the IRA, Inflation Reduction Act. You're gonna hear that word a lot through this, the next five minutes. IRA, Inflation Reduction Act. The IRA is game-changing. It's an innovative piece of legislation that is meant to turbo 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 two months, a global shift to make investments into the U.S.
In a nutshell, you know, just very simplistically, what the IRA has done is take the ITC, the main federal program that supports 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., more, you'll get more from the U.S. in the form of tax credit. On top of that, the IRA gives two, or includes two important provisions. One is called transferability, and I'm not getting into the weeds, so please, you know, allow me here.
Transferability means that you can take this tax credit and sell them to anyone that has tax, basically, pay taxes. It's a U.S. company. The second one, as I say, expanded the sunset for 10 years. Now you're sitting in Spain, and you can put capital everywhere, and if you're thinking past 2026, it's the natural place to look at, it's the natural place to go. Let me just go back here. 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.
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 it's ERCOT or it's SOCO, requires a specific strategy. That requires specific knowledge and teams, and we're building all this capacity. Then we're doing PV, but when we're 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, you know, come and increase our pipeline from 4.7 GW to roughly 10 GW in the next three years. I mean, we've done it already. We doubled the size of the pipeline between 2022 and 2023, from 2.2 to 4.5, 4.7.
We'll finish the year around five, and the expectation is to go from 4.7 to 10 GW by the end of 2026, and have, at that time, some of our late-stage projects in construction. Before I move on again to David, I just wanna finish my presentation with, you know, 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 wanna 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're always in the driving seat.
We might have some so-called development arrangements, but we always lead, develop all these projects. So in short, just wanna, you know, one word, we wanna prove that we are in control. We know what we're doing, and we have a clear vision of where we wanna be. So with that, thank you, and back to David.
Well, thank you, Pablo. I'm gonna talk about storage, right? As we say here, it's a game changer. Let's talk first about... This history is something you all know, but I 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 3-3.5 million. Look where we are. I mean, we are reaching EUR 0.4 million, which last reported. It's unbelievable, but it's still going down. That's really the miracle of energy in the twentieth century.
I mean, that's what is really fitting the whole scene, and now it's gonna help storage, and now of the future is gonna help hydrogen, and it's really, really the biggest change in our industry. If you look, I think this graph is very interesting. If you look at the percentage of solar. Well, back in 2010, solar accounted for roughly 20% of all new renewable installations, right? Whereas wind accounted for 50%. Look at the situation in 2022, and this trend is even—this gap is even 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.
This is not considering storage, because storage, you know, matches much better with solar because it needs to cycle every day, and solar really provides a 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, famous duck curve, right? I think probably was invented in California at one point. Yeah, and this is the tail, and this is the peak of the duck, 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 critical payments, during the day, and very high prices at peak, and then in the very early morning, prices go down, go down again. This is what has been happening in Chile already for a while. This is what is happening in California, Australia, and this is what is already happening in Spain, and it's gonna happen in most sunny places with high penetration of solar. Storage, it's gonna be a game changer, right? Because it's the solution. Basically, it compensates renewable, in intermittency, provides grid stability, it's helping more renewables come online, and basically, we are moving the energy from here to there, right? You know, moving to this slide, okay, technologies. You know, 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 flow, like sodium, like—but definitely whatever is commercially available now is lithium-ion. 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, 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 two suppliers and maybe these three.
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 using CATL or BYD, and some companies like BYD, they even have their own brands of cars. We are working with the right companies. This is how this works, and this is a very simplified explanation, but basically, as Pablo was saying, there are two different markets. On one side is a standalone BESS, on the other one is the storage market in co-location with mainly with solar, right?
UK, as Pablo mentioned, is the most developed market for standalone BESS, is the market with the highest penetration, is the laboratory for BESS in standalone in the world, right? And all other markets, we're looking at what's going on in the UK. 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 the standalone market is developing. But believe me, everywhere else, the market is now booming. In every market where we are, there is a wave of development, and it's really happening, right? And then we have batteries in co-location 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're talking about 70%-80%. So this is basically what we're doing in Chile. We also are in Colombia in generation, right? The highest radiation in the world, the highest solar penetration in the world. We are talking about 50% of global generation, right? And well, the demand accounts for 14 GW. There is a regulation for capacity. I mean, what is going on in Chile?
High penetration of solar, low LCOE, there is 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 and in 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, sunny places, as long as we have the right regulation and the duck curve, okay? So we're gonna watch a video now to introduce our project, Oasis de Atacama.
We've been steadily growing over the past years, and now we're ready to undertake the most ambitious project in the history of renewable energy in South America. Welcome to the Oasis de Atacama. Located in northern Chile, the area with the most irradiation in the world, it unifies five oases in a single one, with great production and astonishing storage capacity. Once completed, it will be the largest battery platform in operation in the world, reaching more than 4 GWh. The first phase will be in operation as early as 2024, while the whole platform will be fully operational by 2026. It is backed by top international lenders, and it will generate record-breaking annual volume of energy. An important portion of it is already secured through long-term power purchase agreements with investment-grade off-takers.
Unlike all our projects, Oasis de Atacama is fully aligned with sustainable development goals, helping to avoid greenhouse gas emissions and creating value for local communities. It's a huge step forward for us as a company, but also a new benchmark for the entire industry, as the real magnitude of this project can only be appreciated in comparison with already existing storage platforms. Yes, we've told you that we're already flying high, and now we're ready to fly even higher, because the sky is our only limit.
I think many of you are familiar with the names Quillagua, Víctor Jara, Gabriela, Algarrobal. They've 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 get built. The second phase will be Quillagua. The second phase of Quillagua is completed. This, all these plants, except Algarrobal, are completely ready to build.
Again, we have been working very hard 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 GW of solar, and we are talking about 4.1 GWh of BESS, right? You know, 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 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, one, let me repeat that, that's very important, 1 gigawatt of solar, 4.1 gigawatt hours 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 three phases, right? With the announcement we announced last week with Copec and Emoac. Is, again, like Repsol in Spain, the largest utility oil and gas company in Chile, investment grade. We are very close to announcing the PPA for phase four for Gabriela. I think we will announce that before the end of the year, and it will only remain the Algarrobal plant that is in advanced development, but it's still not ready to build. The other plants are ready to build.
So we have the plants, we have the PPAs, we have also mandated the banks, right? I think Emi will give you more, more information. Many of you are in this room today, and, and it's, I, I believe, it's the most exciting project of renewable energy in, in Latin America right now. Very importantly, we have closed, or we are closing the procurement, right? Well, in fact, we, we have invited our one colleague from BYD. Thank you, Camilo, for coming. Yeah. So, yeah, we are working very, very closely, and you have the chance to, to speak with them, with, with companies like BYD and CATL, right? Because they really have the right, the right stuff right now. This is an important slide. It's a case study.
Once all the project of Oasis de Atacama is completed, right? We are talking about the project of 944 MWs, that's close to 1 gigawatt, that's peak of solar. We're talking about the highest resource irradiation 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 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 five 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 gonna 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 65%-70% of the energy. This is contracted 15 years PPAs, indexed to inflation, right? That's very important. We are selling the energy 3-3.5 times 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, so you also have, like, a trading benefit. Okay, so that's the plan. Then, we still have some solar energy, and 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 is curtailment or whenever there are zero prices, we take those hours to charge the battery, and we keep the best non-peak 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 use to optimize the whole thing. Once everything is completed, we are talking about EUR 0.2 million per MWh.
So all these taken into consideration, we are talking about a project that, once completed, will have revenues between EUR 200 and EUR 220, EBITDA between EUR 175 and EUR 200, 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 gonna give the floor to-
Yeah, we are going to make now a coffee break for 15 minutes or so. So we, we'll get back with presentations on the financial review and ESG review. Thank you.
Okay, good morning. Thank you very much for attending, especially my friends and sell-side analysts that are coming, some from London, some 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 sign 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 and now expanding into U.S. Well, let's talk about numbers. So, those are our key strategic targets for 2026. As you may know, normally in Q3 result 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, in previous Q3 result presentation of 5 GW of installed capacity for solar and 1 GWh for storage. Last year was first time we provide that target. This year, we are not only providing installed capacity, but we are splitting it between gross capacity, including the asset 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-sale minus corporate, and run rate EBITDA, considering 2026 projects that are connected, fully operational from the beginning of the year.
Then, in slide 32, as I said, we are providing installed capacity. Right now, as of today, 2023, we have 1.7 GW of installed capacity in PV. That include 160 MW in operation from the latest update we provided to the market in Q2 result presentation. We have taken out Belinchón project. Belinchón, 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 GW. This part of the slide is showing mainly Belinchón 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 GW of installed capacity. That is split among the different regions where we are. 40% should be in Chile, 30% Europe, 30% U.S. From those 3.5 GW to reach 5 GW 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 100 to 200 MW. 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 announcements in Valkyria. So we are considering a rotation of 1.5 GW within this period of PV solar projects. Then, on the right side, we have a storage. We have multiplied by four the previous year targets we had in place of 1 GWh by 2025. As you may see, this is mainly Oasis de Atacama. We have more opportunities to increase, but it's not in this current business plan. We are considering the rotation of one of the projects include 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 good news, because also we are investing a very profitable returns, and this is what is showing our execution capacity. For 2023-2026 period, we are considering EUR 2.6 billion of investments.
That is coming 60% for the projects 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 investment 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 overstock of panels, and in 2021, it was the other way around. It was an overdemand for panels, for logistics, that created an inflation from $0.17 in 2020, for modules, to almost $0.30 in 2021. Now, we are negotiating for 2024, below $0.13, and we consider this deflation could 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 MW. So, 20,000 in 2021, right now, below $2,000. Steel prices, that is affecting trackers, for instance, was $1,200 per ton.
Today, 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 GW worldwide production in 2020 to today, that in 2023, the expected industrial capacity worldwide is gonna be close to 500 GW. That is pushing prices down. For BESS, it's quite the same. 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 BESS suppliers that like BYD, CATL, and more Chinese player.
Geopolitically, if I may, as you may know, the 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 slide, 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 sell. 20% should be merchant.
We need to leave some part to merchant. Fifteen-year is the period we are targeting for those PPAs. Normally, we want to sign pay-as-produced PPAs, so we don't have the risk of a lack of production, dollarize or euro. For dollars PPA, like the one that we are closing 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 start 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 corporate. Really recently, this is a premium PPA.
This is the game changer PPA we have closed that will provide support to 2 GWh of storage system in Chile with Emoac, that is the renewable subsidiary of Copec. We are negotiating another 2 GW of PPAs, not only in Latin, but a big part as well in U.S., with the... We are negotiating actually with the big tech there, like, Microsoft, Meta, Google. We have, well, very good department closing PPAs everywhere. Then, EBITDA. Today, we are- we have an energy EBITDA above EUR 45 million. This is more than three times the energy EBITDA we were having a couple of years ago, okay? This is growing exponentially.
Non-energy EBITDA is coming from the rotation of asset that I said, as I said, as we are selling bigger project 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 150-200 million EUR. The lower range of this energy EBITDA actually is quite conservative, because if you just consider the Oasis de Atacama project, the one that should be in operation by that date, the just with that platform, it should be in 130-150. So we are quite conservative in that case. Run rate should be 250-300.
That is considering the rotation of 100% project. As you know, if we sell 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. You know, normally, and the PPA starts. 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 $ per MW for interconnection cost, it should be less. And the current CapEx level, we're, we are about to sign. As well, inflation normalize of 2%, that right now, for instance, this year, it is about it. And depending on CapEx and, and inflation adjustment, you have, of course, sensitivities over this business case. So now I'll hand you over to our CFO, Emi Takehara, that is gonna explain how are we going to finance it.
Thank you, Daniel.
Toma.
Thank you. Hi, everyone. So a key question for many analysts and investors is relating to—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 MW asset rotation per year over the past three years, and we updated this target to 350-450 MW per annum over the period 2023-2026. This is a huge increase. We expect this to be multiplied by three, since we have increased our pipeline, and we are confident that we can now rotate larger utility-scale plants.
It's also an opportunity for us to set a very high valuations 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're confident that we will meet this target of 350-450 MW asset rotation per year, since we have already achieved 50% of this target over the period 2023-2026, and more than two-thirds, if you only consider the period 2023-2025.
We will announce, 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 early this year the potential sale of a 49% stake in a 1.1 GW 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 MW was transferred successfully in Q3 to EQT-owned company at a very high valuation of close to EUR 1.2 million per MW. The second milestone, which is the largest, is the deal that we recently announced with Allianz for close to 300 MW. This deal also has been completed with a very high valuation of close to EUR 1 million per MW, 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 on 85% of the Valkyria process. We sold close to 450 MW 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 MW 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 finance.
We'll 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%-10% development and construction margin. This translates into a CapEx coverage of close to 85%-90%. We also wanted to provide some updates on the upcoming deals, the largest transactions that we will close shortly. First of all, in Spain, the Valkyria assets are currently under financing. This represents a financing of close to 500 MW. We decided to finance this project under a club deal format with three 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 de Atacama, is by far the largest financing of Grenergy. This financing will be close to $1 billion. It's, 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're glad to announce that we managed to mandate 5 entities for this financing, BNP Paribas, Natixis, Scotiabank, SMBC, and Société Générale. Each one will have a fifth of the ticket for this transaction. The co- the conditions are extremely competitive, with margins in the 200-225 basis points range, and we also achieve very, very competitive debt sizing terms, with expected leverage of 80% over 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 marking a before and mark 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.
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 tenure of eight years with two 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 a new, an innovative ESG-linked swap associated with the loan, 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 re-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 two years, we have managed to fully removed 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. Third, we delivered on our M&A targets, and we managed to achieve more than two-thirds of our initial divestment targets, while the remaining assets are very well advanced, and we'll provide update in Q1. So over the period 2023-2026, 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 plan 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 on 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. We plan to maintain a very conservative corporate leverage below 3.5 times during this period. 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 GW of solar capacity installed or under construction, as well as 3 GWh of storage, which will translate, as explained by Daniel, into a stable energy EBITDA run rate of EUR 250 million-EUR 300 million in 2026. I now hand over... Rocío, for the-
Thank you.
ESG part.
Yeah. Thank you, Emi, and thank you all for joining us today. Let me start this presentation by detailing the three reasons why ESG is the heart of Grenergy. Grenergy is extremely committed to sustainability, as we believe in a green, transparent access to funds aligned with the EU Taxonomy. We also believe in creating a positive impact in both communities and environments in the countries where we operate. And last but not least, we believe in an excellent ESG performance as a foundation of our business, making us a stronger business and a more trustworthy entity for our stakeholders. During the last three years, within the framework of the current ESG roadmap, 2021-2023, we achieved many important ESG milestones.
For instance, the issuance of the first green bonds program in 2021, or the creation of a 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. Now that we are immersed in the fourth quarter of the year, we can ensure that the current ESG roadmap, 2021-2023, 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 Disclosures.
What's 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 director, which is the new sustainability strategy, 2024-2026. 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 will guide our business during the next three years. Moving on to our performance in the ESG ratings, I would 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 have received the updated scores in Sustainalytics and MSCI, and as you can see, we got better results as we reduce the level risks in Sustainalytics from low risks to negligible risks. 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 Dow Jones Sustainability Index or 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, 2024-2026. So as I mentioned, I'm honored to have the opportunity to close the current ESG roadmap, 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, will make us, well, be 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 this heart beats at the right pace, 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 structured in four 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, and 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 enhancers 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 the other, 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 consultation to some of you, our key stakeholders, investors, analysts, the board of directors, and we finally agreed on the nine priorities of the company for the next three years, which are the ones involved in the right side of the slide. Sorry. Climate neutrality, conservation of biodiversity, circular economy, talent retention and attraction, well, respect of human rights, and so on. So once we defined the dimensions and drivers, it was time to set several objectives for each driver. To do so, we've made our best to try to set measurable, achievable, and quantifiable targets in the short, medium, and 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 three years, and not only to be reported to the ESG department, but also to the committees or the board of directors. So you, if you have, well, more interest in knowing this whole strategy, you can download the, from the webpage, the whole strategy. Well, before closing, I would like just to remark 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 bonuses of all employees associated with ESG aspects, to have more than 90% of our providers evaluated in terms of ESG aspects. Also, to invest more than 90% of our CapEx in activities aligned with the EU Taxonomy, and finally, to be able to report correctly the ESG KPIs in accordance with the 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 Rocío, for your presentations. Well, we've managed to beat the agenda for five 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. One second.
Good morning, it's Jorge Guimarães from JB Capital. I have one question. Is it possible to elaborate on the PPA prices of Chile? Thank you very much.
Don't know, Daniel. What do you reckon?
Yeah.
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, and mostly in... Well, in the US, it depends, are linked to inflation, and that really makes a difference, right? But it's somewhere, I think, even above 85%, right, Danny? Yeah. So that's all, all I can read, I can say.
Thank you very much.
Thank you for the presentation and taking my question. So, I would like to know a little bit about, you know, solar plus batteries. It's a new model for everybody. I guess that the more important things are financing and PPAs. So can you clarify more or less what are the main differences in financing in a solar plus batteries model versus PPA? It looks like from what you commented, you know, financing terms look very good and similar to solar PPA, but I wanted to clarify that. And then in 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.
Thank you, Fernando. I think before I leave, will leave Emi answering the, 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. We have-- It's been a 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 the interconnection point, so we avoid what is called in Chile nodal risk, right? That's, I think, very important, right? Another is the curve. I mean, we deliver the energy whenever the energy gets produced, so, and we have a commitment, but it's a monthly commitment.
I think it's 65%-70%. Right, Danny? So, I think we are very, very covered in that way. And well, the off-taker is buying the energy at the interconnection point at the north. They might use that energy all around the country, but that's not really in our, on our side, yeah. And about how the market is evolving, I mean, only a year and a half ago, many lenders were, you know, considering that storage was something new. They had some experience financing storage systems in the U.S. I think that's the case with some of the lenders that are here today. But that view 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 gonna say: Okay, you have no interconnection risk, no nodal risk, no curve risk, because that's the problems that some project companies are facing in Chile in the past. But apart from that, either you have storage or they don't even consider your project, right? Apart from that, Emi, I don't know if you want to add anything.
No, 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, you know, 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 or 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 aspect that has enabled us to reach this high leverage, is that, you know, you can get 20 years guarantee on a storage, which was not the case probably 2-3 years ago.
Good morning. Namsen Chui from Barclays. Thanks for the presentation. I also have one question on storage, and I'm looking at presentation slide 29 over here, so the maths. 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 slide, you also assume a battery life of 25 years. Am I right to understand that the supplier is going to give you a warranty to make sure, say, you have 70% of the capacity by year 15, then probably like 60% by year 20, and 50% by year 25? And that's all considering the deep charging, deep discharging from 0% to 100%, 'cause 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%-14% IRR after the 15-year PPA? I know it's nice to have above $85 per MWh PPA price. What's your assumption after year 15 to get your IRR? Thank you.
Okay. Thank you. Thank you very much. I think... Well, our procurement manager is here. I think you can, maybe Carlos, if you're so kind, to answer some of the, the questions about guarantees and everything, if you can come around, please. About, about the 15 years, about the assumptions we, we are taking, we, we are basically considering-
Two percent.
Uh, sorry?
We are considering 2% inflation adjustment from the very beginning when the PPA is signed. Then, when they plan this operation, the price should be higher because it's in a matter of couple of years, and then 15 years considering that 2%.
Yeah, but I think, same as we do when we give, like, a 20 years IRR, we are considering the extra 5 years merchant based on, on consultants, right? The same as we do in the conservative side-
Yeah
- of the consultants' prices, right?
And basically, about your question about the warranty period, they and their competitors are giving from 20- 25 years warranty. But apart from 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 up 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 a curve, not warranty, but a curve above 65% up to year 25. So that means that the battery is still working.
Can I-
Keep it... Yeah, sorry.
No.
I was gonna say about augmentation.
Yeah
is something you will hear us talking all the time. It's extremely easy in storage, right? I mean, yes, we do have the degradation of 2% per year, but you can augment at any time, right? And it's extremely simple. In a matter of 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 of MWh, 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.
Yeah, I was just gonna say that-
Yeah
... that the lenders will see positively, you know, an augmentation of the battery. Instead of spending money on paying a high guarantee for, for, for, you know, the battery, it could make sense to use, you know, this money to do an augmentation and to increase, you know, the life, the life of the battery. So we expect the life of the batteries to be, yeah, well beyond 20 years because of this increasing investment in the, 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 in 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 with lower CapEx, or we will have some recycling upside, of course.
Yes, good morning. Paul Chabran from Kempen.
Good evening.
Still one question on batteries. I think part of your asset rotation program includes to rotate 1 GWh out of the 4 GWh. Could you maybe help us understand what the multiple could look like on this type of transactions? Because I don't think we have a lot of, you know, comparables.
Well, you know, the figure we are giving is an estimate. You know, our asset rotation sometimes is opportunistic. I mean, we start with Valkyria, looking at more 49% of all the portfolio, and finally, we ended up, like, farming down, like, 100% on 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, getting working with 11%-14% IRR gives 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.
We will explore minority as well as majority. I think the presentation, we outlined the possibility of farm-down one of the four legs of Oasis de Atacama, but it might be minority interest on the whole package. We will explore both ways. Yeah.
Okay. Just to add, on that, for the business case we have presented, we are considering to keep a conservative, EV invested capital of 1.3 times. That, as David 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?
Hello, it's Gonzalo from BNP Paribas. And first of all, thanks a lot for the presentation. I have two questions on my side. First one would be around capacity pay, capacity payments. Have you already secured these capacity payments for the PPAs that you have signed in Chile? And how does the 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 that, of those arbitrage opportunities are you considering within the EUR 200-225 revenue range?
Okay. 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 there was so many projects of storage coming up, it was becoming clear that the regulator wanted to promote the introduction of storage. So there's been a change in those capacity payments. There's been a temporary, as they do things in Chile, normally they do things quite right.
There's been a temporary period that pure solar projects will still get the capacity payments, but it's getting very clear that to get the optimal level of capacity payments, you need to reach five hours. So that's one of the reasons behind being able to do it. The other reason is that you want to make absolutely sure that your battery gets the full charge, even in the worst day in winter, right? That's why in Atacama, we can go for five hours. That's why central Chile will be four hours. That's why in sunny places in Spain will be around four hours, because otherwise, you know, you lose more cycles, right? Yeah. So that's basically about the capacity. Sorry, your second question was?
About the arbitrage.
About the arbitrage. I think we are not considering-
We are not considering-
Yeah
... that arbitrage opportunity-
Yeah
... in the business case. We, 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 on it.
Yeah, and there is also a very high upside that we're also not considering for the first years. We're doing we're following a similar, similar policy as we did in Spain recently. I mean, the PPA are starting in, mid, mid-2026.
Yeah.
So we have like, we're going to be full merchant, at least, at least for a year. And there's a big upside there, but we have considered the flat prices for... But we are still considered three figures prices for arbitrage. Yeah.
Yeah, thank you. Thank you very much for taking my question and for the presentation. Anis Zgaya from Oddo BHF. So I have two question, if I may. The first one is on financing. You are only expecting EUR 600 million from disposals on a target capacity of 1.5 gigawatts in PV and 1 gigawatt in storage. Is it too cautious? Because it seems too cautious. Second question is on your expectation for the build-to-sell activity beyond 2026. Should we expect the same trend? Thanks.
We are not providing guidance on build-to-sell activity after that period. However, as the company is growing the pipeline and the project 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 Latin, but as well in Europe, in U.S. I assume that we will have more opportunities to rotate.
Yeah, just keep in mind, we are currently delivering already roughly 1 GW per year. We're rotating 300-350. As we explained, we are getting ready to deliver more because we're going to be in more jurisdictions, and we are going to be ready, hopefully, to deliver as much as 2 GW per year from 2026. So I think that will increase the opportunities for asset rotation, right? You also ask about the 600 MW, but those are the, this is the margin, right? Yeah, in-
... Yes, the, 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, which range from between EUR 1.5 billion to EUR 2 billion.
Thank you so much. Fernando Lafuente from Alantra. Three questions, quick ones, please. The first one is on corporate leverage. You are talking of this maximum target of 3.5 times. I was wondering, when should you reach a peak, and, and how can be calculated 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, David, in the comments you made on Atacama.
On one?
On Atacama.
Atacama.
Is it possible to sell only a battery when you have a hybridized project, or if there is a disposal, it has to be altogether? 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 sub-market? And how do you see them evolving going forward? Thank you so much.
Okay, before I forget the first two 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 plan, the plan as a whole, right? There are gonna be many models coming-- many models are coming up, yeah, on, I think once again in Chile, these are being called, we are starting to call them, like, virtual PPAs. I mean, you, 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 co-location, but virtual.
The plan 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 single project.
Regarding covenant, the way we are calculating that covenant is just corporate 3.5 times, not considering the EBITDA produced by the project with project financing, 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 non-recourse project finance to corporate. Then, 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 I, 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 gonna dispose of assets in Q1 of next year, so there will be, you know, 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 3.5.
Sorry, just a follow-up on this one. Is it, is it fair to assume that the, your corporate debt will increase only in this EUR 150 million that you are adding in the, in the bridge, in the financing bridge?
That's what we have, yeah, under our business plan.
Thank you so much.
Well, then, so then the U.S. In 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 IRA. We're targeting high single digits, which is where the market is, and we're doing it, you know, with a number of assumptions. So the current investment cycle climate is, you know, we have higher rates, so you know, this obviously is possibly going up, but it's clearly much higher, possibly coming down in the next few 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.
Hi. Gonzalo Sánchez-Bordona from UBS. Thank you very much for the presentation. 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 plan outside of Chile. I'm assuming everything that you have there for the plan in 2029-2036 will be in operation in Chile. But thinking a little bit forward and thinking about your expansion of storage in other geographies, I'm curious to how you think about the structure, because this particular case has actually a quite unique structure from a kind of PPA regulation and financing.
So do you foresee these kind of very unique structures happening in all coun- in other countries, or do you expect to be really on an other, like, project-by-project basis, in terms of how you expect to the storage to develop? Thank you.
Well, it's very clear that Atacama is a unique place in the world, right?
But I think the same structure could be replicated one day in Spain, in other geographies where we are, like Texas, right? Again, what we need is a place with a high solar resource, right? So to make sure we can generate the energy at a very competitive level, we need a 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 farther down, 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 Pablo in California, right? And I think there's something going on in Texas as well, yeah, coming up. And we're 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 UK or in other markets might be very different. Right now, there are more merchant markets, but you can get a payout in sometimes in four or five years. So it's a completely different approach, but it's also something that we will work, and we will give you the information. Yeah.
Ah, here you go. Okay.
Thank you. It's Henry Tarr from Berenberg. Thanks for taking my question. I guess an overarching question is, as you look at these targets out to 2026, what's gonna be the biggest barrier to hitting them? Is it grid connections? Is it signing the PPAs? Is it permits, financing? But how do you see the highest hurdles?
It's a difficult question, right? But I don't think the opportunities to secure PPAs based on PV and storage are gonna be endless, right? So in my opinion, that's gonna be the biggest constraint, right? Right now, in Chile, there are no really ready-to-build projects, even if, you know, because some, for some reason, four, five years ago, many of the projects of the developers stopped developing utility-scale projects because the country was so saturated. But I believe the PPAs, and what we are also learning is that the cycles in storage are gonna be shorter, right?
Because you can develop or you can transform an existing PV plant in PV and BESS, sometimes normally in a matter of months, because environmentally and socially, you have no, no, no big problems, no big constraints, and then you can build that plant in a year. So I think the cycles are gonna be very quick, and this is something that is gonna be very unique of this market. I'm not sure if you agree, Pablo.
Yes, totally. So it's a different animal, and we chat before, and I think the other element is wires, right? Without wires, we don't have anything, so we need to get grid. What comes first, chicken or egg? Well, 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. But that's quite unique, and we need to take advantage of this opportunity.
Sure. Question: when you look at asset sales, is the buyer's behavior changing? Obviously, 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're quite optimistic. I think there is overdemand of projects, right? We have been able to get those returns and those margins in a difficult environment, right? Because the expectation of IRR of many in insurance companies or pension funds, it's 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't be anything but very 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 in...
I know our M&A team is doing a great job, but still, we're a bit surprised of the high valuations we are getting in the Valkyria project and still the deals we are doing. So yeah, we remain quite optimistic.
No. There's a problem. Sure.
Hi, Jorge Alonso from Société Générale. My question is on the procurement. So is the procurement already closed for the, for the asset with the PPAs? Or considering that the CapEx is coming down, is there an opportunity to increase the, the IRRs because, the time, the time lag on that? And on the procurement side as well, on, on batteries, considering that the suppliers are just a couple of them, two, three of them, how is the, the, the, is there frameworks agreement or how, how is the, the, the, the, the situation, there, you know, to, to be sure that you will, you will, be procured? Thank you.
Okay. Okay, considering we have one supplier in the room. Okay, we are not. We don't want to speculate, Rene. I think this is something we've learned in the last 15, 16 years procuring panels, right? Sometimes you get it right, sometimes you get it 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 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 closed the conditions, right? And this should get delivered in 8, 9 months from us, the first half of them.
And, well, in fact, we are gonna go, and 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, need to secure our procurement. And same as we hedge interest rates, and we hedge in currencies, and you really need to hedge your procurement. Keep in mind that ion lithium is an important aspect, lithium ion is of the price, but I believe the supply and demand is the most important part of affecting the price of CapEx for storage.
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, a subsidy for electric vehicles in China in Q1 next year, that might affect the price dramatically, right? We have already seen that, 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 followed, and I think we're gonna keep doing that.
Okay, we move then to the Q&A from the audience via streaming. We have a couple of questions coming from Flora Trindade , from CaixaBank BPI , and from Mediobanca Alessandro Pozzi. Both are asking about the estimated leverage levels by 2026.
Well, in that business plan, if you consider that, that rotation of asset, that, investment, we should be something around 5.5-6.5 range, total leverage net EBITDA. At the end, it is quite important when those projects start operating. We are considering that, for 2026, main Oasis de Atacama part to be in operation.
Just for its run rate EBITDA? Sorry, the net debt EBITDA you mentioned, is it under the run rate EBITDA or the total EBITDA we have seen?
Total EBITDA.
Total EBITDA, okay.
Okay. Also depend quite a lot about the rotation on how many millions is adding to the total EBITDA. That if we are continuing with those build-to-sell sort of range targets of 350-450, which would be close to EUR 300 million on total EBITDA.
Okay, the next question comes from Julia Scheufler , from Janus Henderson. She has two 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 it's the price is in yuan, the yuan we consider 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 the evolution of supply and demand is gonna be the main factor, right, affecting. But again, we want to hedge our CapEx plan for Oasis de Atacama, except for Algarrobal. But the moment we secure the PPA, we want to hedge the procurement. Right?
And just to mention that in the business plan we have presented, we have considered Oasis de Atacama assumption that we explained, $200,000 per MWh. So if CapEx or lithium move down, that should be an upside.
We are expecting, right now, at this moment, we are expecting somehow a lower CapEx than that, maybe 10%-15% down already.
And then the million-dollar question, Trump, huh? The what if. So, I'm gonna go a little bit around the edges, and you will see me in a minute. So PTC and ITC, there's some loop. So PTC and ITC. These are the two main federal support mechanisms, and they've been there for ages. So PTC is in the 1990s, ITC is in the 2000s. Actually, it was, like, 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 the key question that might affect the deployment of renewables, 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.
What the IRA has done is to broaden the stakeholders. You know, 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 are gonna 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, so we have a possibility. Congress killing the entire IRA, yeah, 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, US elections are gonna be tricky.
We'll go through, you know, bits and bounds, but I don't see a change. The trend is there, it's a big train, and I just don't see the factories shutting down because of Trump. I mean, if you're building products and people want your product and you're making money, why would you? So not. We don't anticipate a change in the administration, a change in the office, a direct diversion of our plans in the U.S.
Yeah, the state with the most plans under construction is Texas, couldn't be readied. You know, I mean, it's, it's... Yeah. So anyway, we—I don't, we are not saying that if Trump wins, it's good news, obviously, but we don't think it's gonna—it should change dramatically, right? At least that's-
I mean, it's not like the world is a very stable environment and not like officials, right? So, you know, 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 questions.
Yes, there is.
From the audience. Yes, so just one last question from Nas.
Thank you. Hi, it's me again. Two more questions, if that's okay.
Uh-
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 GW by 2026.
Then I look at the appendix, you only have about less than 200 MW of project, including the appendix, before 2026. So I wonder, where are the other 900 MW? I'm asking that because one of your peers, again, in kind of French renewable, they were in the US for the last five, six years, but they decided to pull out earlier this year. They saw the market being too competitive. So I just want to see where do you see the opportunities there? Thank you.
Maybe I start with the U.S., and then we move to the EIB financing. Yes, we're showing two projects in, in advanced stage, but we're not showing the other 4.5 or in similar different stages of development. The U.S. is quite binary. You get the grid, you get the PPA, you get the project. So at least in the states where we are. We're not in California. In California, it would take us 6-8 years to develop project. We're not in PJM, that is closed for business. That would 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, if you have the courage, is the way to put it, you go to ERCOT, you put your hat, your cowboy hat, and you can start a gigawatt project tomorrow. Yes, you will, you know, 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 capital or not, you have the competence or not, that's a different story, but it's a true market. And we have 4.6 gigawatt right now in development. That was by the end of Q3.
We'll reach roughly 5, and we'll continue that growth. So, as we enter into ERCOT, as we continue our expansion in the Southeast, that opportunities will arise. And, and we're not mentioning just because which out of these 54 opportunities are gonna 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 MW or 5 MW or 50 MW. I mean, this is not Italy. Here, if you don't have 300 MW, you're no one. So you get one project, and you've done 25%. You get two projects, you've done 60+% . I mean, here, the volume, the, the sheer scale is very impactful. So, you know, we don't need 5 hits, we need 3, 4.
Yes, I think it's working. On your EIB question, we've been in touch with EIB now, the European Investment Bank, for many years, so you know, we assess financing with them. I think we reach really competitive terms with international banks. You know, 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 so short-term financing. These assets are gonna move out of our balance sheet, so we didn't think it was the most appropriate portfolio to structure it with the EIB. They said we're in touch with them, so you know, 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.