Our Business Model

A New Era of Change

The traditional power industry is currently being reshaped by key megatrends (Decarbonization, Decentralization and Digitalization) that are driven by strong forces at a global level such as:

  • Political agenda (increased climate change/ green  consciousness)
  • New technology (PV, batteries, digitalization, robotics, AI, etc.)
  • Customer expectations (added value services, on-demand, real-time, sharing green,…)
  • New competition (long-term infra investors, oil majors, virtual retailers & generators, etc.)

These three megatrends are inter-related and PV technology has played (and it’s set to continue doing so, together with new technologies such as batteries) a key role in them. As an example of this relationship, falling costs of renewable energy and batteries through new technology and innovation, have increased their competitiveness versus conventional fossil-fuel based power generation, making possible renewable energies to be considered an affordable alternative to fossil fuels, giving a push to the political agenda while providing customers with a product that meets their increased environmental consciousness.

Today PV and wind are already cheaper than building new large-scale coal and gas plants in many of the world major markets. These include India, Germany, Australia, U.S. and China. By 2030, we reach this “tipping point” almost everywhere.

 

Leading the Energy Transformation

As a leading PV solar company FRV is therefore naturally placed at the centre of the power industry transformation (a position many players are seeking to build today) and has the opportunity to become a relevant player in the future power market.

Leveraging on our experience and expertise in the industry, we have built a business model that combines ownership of a diversified portfolio of clean power generation assets in our key markets, seeking long-term operational and financial optimization, with an increased focus in customer needs arising as a result of the power sector transformation.

Over recent years, FRV has experienced rapid growth, moving from a pure PV utility-scale developer to a renewable energy IPP (Independent Power Producer).

As this acceleration continues, we are today, rapidly developing new capabilities, exploring new emergent technologies and business models, through our specialist team FRV-X with the goal to transform ourselves into a future-oriented comprehensive and cohesive ‘green utility/energy platform’.

This strategic ambition will be rapidly realized through revenue generation from our own projects, shareholder contributions and the rotation of assets through minority stake sales and pipeline sales to further accelerate the growth of our ambitious vision and the concrete and timely execution of our business plan.

During the next 4 years, FRV plans to invest more than US $1.5 billion in assets to double the total installed capacity of our projects worldwide, growing from 2 GW at the beginning of 2021 to 4 GW by 2024.

In terms of its geographical reach, FRV is present in many of the global markets undergoing this transformation, such as Australia, Asia, Europe, Mexico, the Middle East and South America.

Our business vision is to become the world’s main platform to build a more sustainable future through renewable energy solutions that improve the lives of people, bringing new opportunities through universal access to clean, efficient and cost-competitive energy

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Achievements to date
Flexibility to adjust and advance business model in response to changing markets
  • One of the first large-scale PV developers, operating largest PV plant worldwide in 2006 (La Magascona, 24 MW dc)
  • Addition of O&M and AM service capabilities since 2007 with own EPC and procurement expertise
  • Change from develop and flip to fully integrated IPP keeping the ownership of assets instead of selling them (2018)
Vision 2019+
Reach utility scale IPP Platform
  • Sizeable pipeline under development over the coming years in regions with strong potential for renewable growth
  • Explore further vertical integration (storage, energy trading)
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Achievements to date
Early identification of and investment in technology and industry trends
  • Technical procedures and design features discussed with suppliers and contractors became industry standard
  • In-house team for battery storage since 2017
  • First solar/ wind hybrid project awarded in 2017 in Chile
Vision 2019+
Implementation of innovative, return-enhancing technical solutions
  • First storage projects being structures and implemented
  • Further explore hybridation and digitalization
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Achievements to date
Disciplined focus geographically
  • Focus on high quality markets where FRV has local knowledge and competitive advantage to grow a sizeable portfolio
  • Flexibility to react to changing market conditions
  • Clear focus on core markets and growth regions
Vision 2019+
Continue targeted growth
  • Focus on core markets and in growing emerging market opportunities
  • Nimble set-up and fast decision-making
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Achievements to date
Our Mission and Future Vision
  • Our business vision is to become the world’s main platform to build a more sustainable future through renewable energy solutions that improve the lives of people, bringing new opportunities through universal access to clean, efficient and cost-competitive energy.
  • Delivering on these goals will create a beneficial impact at a social, economic and environmental level worldwide. We aspire to take the lead in the wider energy industry including pioneering the latest technology improvements to become the preferred partner for any major projects in the sector.
Vision 2019+
Continue a balanced development approach
  • New commercial structures for off take agreements currently being negotiated
  • Flexibility to develop fully merchant projects with gradual de-risking thereafter
Our partnership with Abdul Latif Jameel has fostered further entrepreneurial spirit and broadened FRV's vision

FRV's integrated position along the value chain offers clear competitive advantages

Business model
Technology
FRV Competitive advantages
Only bankable solutions
No exclusivity but strong relationships with top tier suppliers
Technology agnostic
Optimise economics by project/region
Development
Market analysis
Site selection
Initial engineering and technical assessment
Negotiation of key contracts (inter-connection, EPC, PPA)
Strong relationships with different stakeholders and government administrations facilitate permitting processes
Financing
Significant project finance expertise
In-house team to reduce project costs
> US $3b of project debt raised
Able to finance fully merchant projects
Strong track record of working with multilaterals
Equipment Supply
Strong experience in pushing down costs without compromising EPC quality
In-house procurement capabilities
Ahead of market by analyzing variety of manufacturers and technologies
Construction
Established relationships with leading EPC contractors
In-house engineering team, acted as EPC on a number of projects Managed and split main contracts underpinning the EPC by providing wrap up in JV with other contractors
Award on basis of price and technical or financial strength
Commercial Task Force
Dedicated team experienced in securing corporate PPAs
Experienced with gradual de-risking of merchant projects over time to optimize return profile
Long-term Equity Solution
Sale to cash-yield investors at commissioning
Operation and maintenance
O&M of our plants improving the plant's performance
FRV becomes the O&M provider after guarantee with EPC contractor expires
Asset Management
In-house monitoring and Asset Management (AM)
360º AM services including: third party projects services provider, local authorities, financial entities
First company to provide utility scale AM solutions in Australia
R&D
Support transformation of FRV into innovative technological solutions provider
Creating tools to enable FRV to be the Utility of the future
Creating storage and trading capabilities and digitalization (aggregator of services)
FRV controls directly or through contracts
FRV outsources to outstanding partners

Gianfranco Carassale

Lead Investment Officer, Inter-American Investment Corporation (IIC)

The pioneer spirit is something that has always characterized Rafael and José’s team, from their decision to enter the solar energy business to their expansion to new markets with an aggressive strategy able to capture them.

Fernando Salinas

Country Manager at Central America Region, FRV

After nine years working in FRV, I have significantly grown not only professionally but also personally. Living in four different countries and performing a wide range of activities will certainly have a positive impact in whatever activities I perform in the future.

Scott Mackin

Managing Partner and Co-President, Denham Capital

Denham Capital has been proud to partner with the team at FRV for nearly three years in this very successful investment. Rafael, José and their colleagues have captured a leading position in key emerging markets where solar undercuts the marginal cost of electricity.

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