White Paper: RED III and REPowerEU – Implications for Land Financing and Telios
Executive Summary
The European Union has significantly raised its renewable energy ambitions through the revised Renewable Energy Directive (RED III) and the REPowerEU plan. These frameworks set binding targets of at least 42.5% renewable energy share by 2030, with an ambition to reach 45%. Solar energy is at the center of this strategy, with targets of 320 GW installed capacity by 2025 and nearly 600 GW by 2030.
For developers, this creates both opportunity and urgency: accelerated deployment requirements, faster permitting, and mandatory solar in new buildings. For land financing models like Telios, these policies amplify the need for flexible, low-cost, and scalable capital structures that can unlock land and accelerate pipelines.
1. RED III – Raising the Bar for Renewable Deployment
RED III came into force in late 2023. Its key provisions include:
Binding Target: 42.5% renewable energy by 2030, with ambition to 45%.
Faster Permitting: Renewable projects are declared of “overriding public interest,” reducing approval timelines.
Solar Mandates: New and renovated buildings must integrate solar (starting with commercial/public, then residential by 2027).
Implications: Larger and more bankable project pipelines, pressure on developers to secure land positions earlier, increased demand for upfront lease payments and land acquisitions.
2. REPowerEU – Solar as a Cornerstone
REPowerEU, launched in response to the energy crisis, accelerates renewable build-out with a dedicated EU Solar Strategy:
320 GW by 2025, 600 GW by 2030 targets.
EU Solar Rooftop Initiative requiring solar on all new public and commercial buildings by 2026, and new residential buildings by 2027.
Simplified grid connection procedures with a maximum 30-day timeline for rooftop systems.
Implications: Stronger demand for utility-scale solar land and rooftop portfolios, faster permitting and grid connections, and greater need for upfront capital.
3. Developer Challenges Under RED III & REPowerEU
Capital Pressure – Land payments, grid fees, and EPC equity strain balance sheets.
Pipeline Acceleration – Faster permitting means more projects reach RTB at once, requiring more liquidity.
New Segments – Rooftop mandates create additional markets but require aggregation and financing innovation.
4. Telios’ Strategic Role
Telios Land Partners is well positioned to solve the financing challenges created by RED III and REPowerEU:
Upfront Lease Payments / Land Acquisitions – Free developer equity to accelerate project roll-out.
Flexible Financing – Provide capital not only for land but also EPC equity, guarantees, and pipeline growth.
Bankable Lease Structures – Long-term, CPI-linked leases aligned with lender requirements, enabling smoother project financing.
Aggregation Model – Potential to extend the Telios model into rooftops, building portfolios that can be securitised alongside land assets.
5. Strategic Implications for Telios
Faster Deal Flow – With permitting accelerated, Telios must match speed with streamlined execution (1–2 months per transaction).
Rooftop Opportunity – Telios can replicate its land model for industrial and logistics roofs, responding to new mandates.
Investor Messaging – RED III and REPowerEU provide strong tailwinds; Telios offers a vehicle to capture this growth with lower risk and stable yields.
Exit Valuation – Larger, standardised lease portfolios aligned with EU targets will attract premium valuations from infrastructure investors.
Conclusion
RED III and REPowerEU mark a decisive shift in European energy policy. They create unprecedented growth opportunities for solar deployment, while also intensifying the capital squeeze on developers. By embedding flexibility, speed, and scalability into land and lease financing, Telios Land Partners is uniquely positioned to bridge this gap—unlocking capital for developers and delivering attractive, long-term returns for investors.
