Spain's Zelestra aims to power Peru mines with $1 billion renewables investment
Zelestra, owned by Swedish firm EQT (EQTAB.ST), opens new tab, is aiming to produce 1 gigawatt (GW) of renewable energy in Peru as part of its expansion in Latin America, Jose Luis Garcia said in an interview on Tuesday.
"I'm convinced that most, if not all, of the energy projects we build in Peru will be used to supply mining companies," Garcia said, adding that the estimated investment would be between $1 billion and $1.5 billion over the next five years.
"The mining companies have very long-term contracts, and they're going to have to renew them in the next three years," he said, adding that lenders have shown strong interest in financing the projects.
Peru is the world's third-largest copper producer and most of its mines are in the country's south, including Freeport-McMoRan's (FCX.N), opens new tab Cerro Verde mine, the country's largest, as well as others operated by MMG Ltd (1208.HK), opens new tab, Glencore (GLEN.L), opens new tab, Anglo American (AAL.L), opens new tab and Mexico Group (GMEXICOB.MX), opens new tab.
Renewable energy is still a nascent technology in Peru, with hydroelectric plants accounting for 45% of the sector's output, according to government data.
In recent years, Chinese firms have made major acquisitions in the power industry raising concerns of business concentration.
China Southern Power Grid International controls just over half of Lima's power distribution while China Three Gorges Corporation (CYTGP.UL) covers the other half and controls Peru's third-largest power generator.
Zelestra on Thursday inaugurated its $177 million San Martin solar park in the Arequipa region, the largest solar plant in Peru, with approximately 300 megawatts.
The next project is the 238-megawatt Babilonia solar plant, also in Arequipa, with an estimated investment of $140 million.
Data from the Ministry of Energy and Mines shows Zelestra has at least three other renewable energy generation projects in the south, totaling approximately 450 megawatts.
Garcia said there are already agreements with transmission companies such as Kallpa Energy to deliver energy to mining clients.
Regionally, Garcia said Zelestra's goal is to have renewable energy plants - including solar, hybrid and battery-powered - generating about 3 gigawatts within five years. Half of that generation is planned in Chile, 30% in Peru and the rest in Colombia.
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