• Gestamp, rebranded as X-Elio, wants to operate 2.5 gigawatts
  • Ambitions to expand operations in Japan, U.S., U.K., Mexico

KKR & Co. invested hundreds of millions of dollars in the Spanish solar power plant developer it bought last year and is open to spending more to tap into a renewable-energy revolution that it sees increasingly displacing fossil fuels.

“KKR has committed to grow this platform and today we have about half a billion dollars of equity committed to expand this business," Jesus Olmos, global co-head of infrastructure at KKR, said in an interview in London. "We have our targets, but if we find more opportunities, we will be able to inject the equity and the debt that is needed."

After clearing regulatory hurdles to seal the acquisition of Gestamp Asetym Solar SL, the private-equity firm is rebranding the developer as X-Elio, KKR said Thursday in an e-mailed statement.

The cash injection is a sign of the health of the renewables industry even after a plunge in oil prices recast the fortunes of the biggest energy producers. Clean energy has been boosted in the past two months by a global climate agreement reached in Paris, and by a U.S. decision to extend tax credits to both the wind and solar power industries.

“Eight or nine years ago, investors were not really putting a lot of money into solar PV or renewables in general,” Olmos said. “But now, the world has decided to go for a different model where renewables are going to be important. According to our investment thesis, solar PV and onshore wind are going to be the two winning technologies.”

Renewable Records

The wind industry installed a record 63 gigawatts of new capacity in 2015, according to a report on Wednesday by the Global Wind Energy Council. Bloomberg New Energy Finance predicts that solar photovoltaic installations may rise to as much as 68 gigawatts this year, from last year’s record of 56 gigawatts.

X-Elio will stay focused on solar power, and plans to increase its installed base to 2.5 gigawatts in 2020 from about 300 megawatts now, with a focus on rich industrial countries and other nations “with a similar risk profile,” Olmos said.

"The biggest market in 2016 and probably 2017 will be Japan,” X-Elio Chief Executive Officer Jorge Barredo said in an interview, alongside Olmos. “It will keep on being a very important market for the next five to six years. Mexico is also increasingly important for us.”

Barredo said the company aims to expand in the U.S. beyond the 24 megawatts of projects it already owns. X-Elio may also buy assets in the U.K., where it is analyzing "three or four big portfolios,” with a target of operating from 60 megawatts to 100 megawatts there, he said. Olmos named Chile, South Africa and Southeast Asia as other possible areas of expansion.

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