R$460m investment comes on top of previous R$1bn injection
08/01/2022
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Surya Mendonça — Foto: Silvia Zamboni/Valor
Órigo Energia received an investment of R$460 million from the U.S. fund manager Augment Infrastructure with the objective of boosting distributed generation. The amount comes on top of another R$1 billion injection to reach an installed capacity of more than 250 megawatt peak by the end of 2022.
Augment became a major shareholder in the company, along with TPG ART, MOV Investimentos and Mitsui. The company does not reveal the share of the new partner but says that the U.S. fund will not take control of the company.
With this injection and debt raising, the company reaches R$2 billion of investments until the end of 2023 with 500 MWp. By 2024, with new funding planned, the goal is to reach R$4 billion invested and 1 GWp of installed capacity.
Órigo CEO Surya Mendonça knows that it won’t be easy, since the current backdrop of high interest rates makes it difficult to raise funds and the solar industry faces deep problems in its production chains, which have made the capital expenditure of the projects increasingly variable.
“This capital injection gives Órigo more autonomy to accelerate the construction of solar farms, continue investing in technology, and expand the service to new geographies,” says Mr. Mendonça.
He explains that the entry into force of Law 14,300/22, which establishes the legal framework for power self-generation, microgeneration, and distributed minigeneration, brought more security for new investors to invest in Brazil.
“This is a consequence of the attractiveness and predictability that the renewable sector has with the new distributed generation laws that were approved last year. So we see that in Brazil it is possible to attract foreign capital with good projects, a team, and growth plans,” he says.
The executive says that the company serves more than 50,000 customers with a current installed capacity of operational 150 MWp distributed in 40 small solar farms in Minas Gerais, Pernambuco, and São Paulo. The company wants to reach 500,000 customers in the Southeast, Central-West, and Northeast regions.
The strategy is well known and has been working well among companies focused on distributed generation, which means building small plants of up to 5 MWp, disposing of the energy on the grid, and selling quotas of the solar generation to customers. The idea is to direct 90% of the value to increase capacity. The remainder is spent on attracting customers.
In fact, this business model is what attracted the Investment Fund for Developing Countries (IFU), a Danish fund for developing countries that invests in Órigo through Augment. “IFU has made several investments in renewable energy in Brazil, and the investment in Órigo Energia represents our commitment to support the green transition in the country. Órigo has an innovative business model for the development of distributed solar generation sector in Brazil,” says IFU’s CEO Torben Huss.
*By Robson Rodrigues — São Paulo
Source: Valor International