First R$200m already withdrawn by the company
09/12/2024
/i.s3.glbimg.com/v1/AUTH_63b422c2caee4269b8b34177e8876b93/internal_photos/bs/2024/8/A/XJJ7CLQ9CT6CcE8UiZrA/foto11emp-201-brasol-b5.jpg)
Ty Eldridge — Foto: Rogerio Vieira/Valor
Brasol, a renewable energy company primarily funded by BlackRock and Siemens, has announced its first issuance of simple debentures, amounting to R$400 million, to finance its growth plan through the construction or acquisition of new solar plants in the distributed generation segment.
CEO Ty Eldridge told Valor the focus is on infrastructure projects up to R$25 million targeting larger consumers such as industrial clients, telecommunications, and sanitation services. Bradesco BBI advised Brasol on the operation.
“The funds will be crucial for the development of strategic assets and new projects. This is also the reason for diversifying our solutions, as solar energy alone will not meet all of our clients’ needs. Hence, we are exploring battery storage solutions,” Mr. Eldridge added.
Despite the presence of numerous companies in Brazil’s distributed generation sector, the market is consolidating around a few key players acquiring projects, such as Brookfield, Origo, Matrix, and Patria.
At the end of 2023, BlackRock acquired a 45% stake in Brasol. With this investment, the plan is to allocate a significant portion of the capital for acquisitions, aiming for approximately R$1 billion in investments in the company. Brasol’s chief investment officer, Carlos Eduardo de Lima Bacha, noted that with BlackRock’s capital and other partners, along with the debenture issuance, the company now has the necessary funds to pursue these projects.
“We went to the market with a public operation and raised funds for Brasol, giving us discretion in allocating the money for future projects,” Mr. Bacha said. “Part of the funds will be used for purchasing equipment and constructing plants, as well as for consolidation through M&As [mergers and acquisitions],” he added.
The company currently has around 150 megawatt-peak (MWp) distributed across 22 states and aims to reach approximately 500 MWp of installed capacity by the end of 2025. The strategy involves utilizing Brasol’s equity, shareholder contributions, and other financial structures. The first R$200 million has already been withdrawn and is available for upcoming opportunities.
Recently, the company finalized an agreement to acquire solar farms from energy trader BC Energia. Initially, this partnership will involve controlling 13 projects with a generation capacity of 60 MW, requiring investments of R$250 million. The plan is to acquire 35 solar plants, demanding investments of R$800 million, as reported by Pipeline, Valor’s business news website.
This financial arrangement is not unprecedented. Raízen sold 31 solar projects to Élis Energia, a company controlled by Pátria Investimentos. Brookfield injected R$1.2 billion to establish a 300 MWp generation park through its subsidiary IVI Energia, with an undisclosed amount, and continues with the construction of future plants. Additionally, Origo Energia, backed by I Squared, raised R$600 million to finance the construction of around 150 small solar plants in 11 states.
Camila Ramos, CEO of Clean Energy Latin America (CELA), a consultancy specializing in the renewable energy sector, noted that remote generation projects have been using several financial instruments, including equity from investors, commercial and development bank financing, as well as capital market instruments such as Real Estate Receivable Certificates (CRIs) and credit rights investment funds (FIDC), simple debentures, and more recently, incentivized debentures.
“According to Cela’s annual survey of financing volumes for distributed generation in Brazil, this volume fell for the first time in 2023. However, in 2024, the financing market rebounded and is expected to show higher volumes than the previous year,” Mr. Ramos said.
*Por Robson Rodrigues — São Paulo
Source: Valor International