Zelestra To Power Peru Mines With Green Energy Push

Zelestra, the clean energy division of Swedish investment group EQT, will invest $1 billion to $1.5 billion in the next five years to boost Peru's clean energy capacity, targeting the use of power for mining activities in copper-rich southern Peru. The initiative will add 1 gigawatt (GW) of new clean energy to Peru's electricity grid, strategically positioned to power Peru's most important economic driver: mining.

Jose Luis Garcia, Zelestra Latin America CEO, added that most of those renewables will directly serve mining companies. "I'm confident that most, if not all, of the energy projects we develop in Peru will be to serve mining companies," Garcia said. Garcia explained that the long-term power sales agreements with mining companies bring financial security and stability to those giant-sized infrastructure projects. "The mining operators have extremely long leases, and they're going to have to renew them in the next three years," he said, pointing to the time frame for renewable energy to be the industry's source of choice.

Peru, which is the third-largest copper producer in the world, hosts some of the largest mining operations in the world, such as Freeport-McMoRan's Cerro Verde, Glencore's Antapaccay, Anglo American's Quellaveco, MMG Ltd's Las Bambas, and Grupo Mexico's Cuajone and Toquepala. All these are located in the south, therefore the region would be a good location for Zelestra to invest in renewable energy.

The firm has just commissioned the San Martin Solar Park in south Arequipa province—a flagship $177 million facility and so far Peru's largest solar plant with 300 MW capacity. The commissioning is an important milestone in Zelestra's regional decarbonization plan to electrify industrial operations while delivering long-term stable renewable power supply to high-load customers such as miners.

After the success of San Martin, Zelestra is gearing up to undertake its next large project in the region: the Babilonia Solar Park, a 238 MW complex priced at an estimated $140 million. In addition to Babilonia, the firm has three more renewable projects in the works in southern Peru, for a total of about 450 MW. These programs are managed by Peru's Ministry of Energy and Mines, which views such activity from the private sector as essential to diversify the energy mix of the country and meet climate objectives.

While renewable energy is a growing sector in Peru, the nation already produces 45% of its electricity from hydroelectric sources. Yet, the growth of solar and hybrid schemes will flip the situation around, particularly as growing energy demand accompanies growing industrial activity. Zelestra intends to install 3 GW of green capacity in five years in Latin America, and Peru will account for 30% of capacity. The balance will be split between Chile (50%) and Colombia (20%), creating a multi-national presence of EQT's clean energy portfolio for the region.

Aside from the technical expansion, Zelestra's entry into Peru comes at a time when there is increased scrutiny of concentration in the energy market in the country. Most of Lima's power generation and transmission are in the hands of Chinese companies such as China Southern Power Grid and China Three Gorges, eliciting concerns about foreign control and national infrastructure prowess. Zelestra's domestic initiatives, which have the support of a European investor with a sustainability horizon spanning several years, provide a counter-narrative that resonates with agendas for national energy security.

In order to facilitate efficient delivery of energy from its projects, Zelestra has also collaborated with transmission companies like Kallpa Energy to supply cleaner energy to industrial consumers at a reduced cost. Such collaborations are quite crucial given the fact that large-scale mining operations are looking for greener alternatives to cater to environmental goals as well as respond to increased investor and regulatory pressure.

Zelestra's devotion to the Peruvian market was underpinned by its green financing success in North America over the past year. The firm raised $113 million of green financing for its Indiana solar project, which provides clean power to tech firm Meta. This achievement proves that the firm can utilize green projects in challenging markets and is hopeful to raise institutional finance for green infrastructure.

With a keen eye on establishing a safe, big-scale renewable energy foundation for southern Peru's mining belt, Zelestra is leading Latin America's clean energy revolution. The balancing of intelligent project locations, power purchase agreements, and investor support bodes well for Peru's mining sector as well as its general direction towards decarbonization and energy diversification.