Brazil has access to clean energy, which is an advantage, David L. Goldwyn says
19/09/2024
The energy transition to a low-carbon model is critical for at least three reasons, said David L. Goldwyn, president of Goldwyn Global Strategies.
One reason is the very extreme environmental consequences, such as those seen in Brazil, Europe, and the United States. Another is geopolitical, with climate migration having very serious impacts, such as civil unrest. The third is opportunity. “We are talking about a transformation of the global economy and this is a tremendous opportunity for jobs for Brazil,” he summed up.
Mr. Goldwyn pointed out that Brazil has access to clean energy, which is an advantage. “But it takes a lot of political work to get to where we want to be.”
Green energy and energy transition areas are ripe for cooperation between the two nations, said U.S. Ambassador to Brazil Elizabeth Frawley Bagley
05/15/2024
Elizabeth Frawley Bagley — Foto: Vanessa Carvalho/Valor
The U.S. ambassador to Brazil, Elizabeth Frawley Bagley, stated today (15) at the Summit Valor Econômico Brazil-USA that the United States is ready to invest and cooperate with Brazil in partnerships related to the energy transition and green energy, areas she said have great potential to increase trade relations between the two nations.
Participating in a panel on the 200th anniversary of the bilateral relationship between Brazil and the United States at the Summit Valor Econômico Brazil-USA, Ambassador Elizabeth Frawley Bagley highlighted the promising prospects of the green economy. “Brazil’s focus on the energy transition to clean energy is an area in which the U.S. is ready to invest and which offers excellent opportunities to further solidify the partnership between the two countries,” she said. The event, held today (15) in New York, gathers Brazilian and American businesspeople, government officials, and experts from various sectors to discuss the challenges and main business opportunities between the two nations.
Ambassador Bagley, whose diplomatic experience includes serving as a senior advisor to Secretaries of State John Kerry, Hillary Clinton, Madeleine Albright, and as a special representative to the United Nations General Assembly, praised the efforts of both countries to create jobs and increase prosperity for their people.
She highlighted the partnership announced last year by Presidents Biden and Lula, aimed at combating precarious work and promoting the creation of decent jobs. This initiative, formalized during the UN General Assembly, involves collaboration with trade union partners from both countries and the International Labour Organization (ILO).
The U.S. Ambassador also expressed solidarity with the people of Rio Grande do Sul, mentioning that the United States is sending donations and supplies in partnership with the Army and the Foreign Affairs Ministry to mobilize resources for the affected regions. “We are with you. Ten of our people have lost everything, and we share not only the pain of this tragedy but also the solidarity,” she said.
Private sector creating jobs
Ambassador Bagley pointed out that American exports to Brazil support almost 150,000 jobs in the U.S., underscoring the significant role of the private sector in both countries in generating job opportunities for their citizens. She also mentioned that the United States is proud to be by far the largest foreign direct investor in Brazil, with a total of $191.6 billion invested in 2021.
The primary U.S. imports to Brazil include industrial and energy-related products such as refined fuels, natural gas, fertilizers, aircraft, and medical instruments, according to the U.S. embassy. Conversely, Brazil’s main exports to the U.S. are crude oil, aircraft, iron and steel, coffee, and cellulose.
Ambassador Bagley addressed an audience of Brazilian and American businesspeople, government officials, and experts from various sectors on Wednesday (15) at The Plaza Hotel in New York. The event is part of a comprehensive program celebrating the 25th anniversary of Valor, which will conclude in May next year.
Celebrating 200 years of bilateral relations
Regarding the bicentennial of relations between Brazil and the U.S., celebrated this year, Ambassador Bagley noted that hundreds of events are planned, including exchange programs, art exhibitions, concerts broadcast via YouTube, and the first NFL game in Latin America. “The bicentennial is an opportunity for an even better future, highlighting the importance that our bilateral relationship has had for the economy and our peoples.”
She also emphasized the historical support of the U.S. in significant moments for Brazil, such as being the first country to recognize Brazil’s independence in 1824, even before Portugal. “We recognized Brazil’s independence before Portugal, and we’re proud of that,” she remarked.
The ambassador stressed that the economic partnership forms one of the relationship’s foundations between the two countries.
“As the largest democracies in the Western Hemisphere, the partnership between Brazil and the U.S. is rooted in a shared commitment to sustainable economic growth and prosperity,” she said.
In an interview with Valor editor-in-chief Maria Fernanda Delmas following her panel discussion, Ambassador Bagley highlighted the importance and potential for growth in sports diplomacy activities, including investment partnerships in sports courts and training for Brazilian athletes by NBA professionals. “We will also collaborate in soccer between the women’s soccer teams of the two countries,” she added. “A lot is going on.”
Regarding the Brazil-U.S. CEO Forum, a group formed in 2007 that brings together up to 12 U.S. CEOs and 12 Brazilian CEOs to develop joint recommendations for both governments on how to increase bilateral trade, Ambassador Bagley praised the role of the American Chamber of Commerce (AmCham) in bringing companies together. “We talk about the green economy and green energy; we’ve been working with Embrapa [Brazilian Agricultural Research Enterprise] for several years. Everyone was very impressed with the Brazilians, their commitment to entrepreneurship, and their technical knowledge.”
On potential investments in the transition to a green energy economy, the U.S. Ambassador mentioned that several proposals on green hydrogen and infrastructure will be presented at the G20 Leaders’ Summit in November 2024 in Rio de Janeiro, attended by leaders of the 19 member countries, plus the African Union and the European Union. “We have a lot of cooperation and coordination [going on] and a lot to discuss.”
Country is entitled to access part of the company’s $15bn fund
09/22/2022
André Flores — Foto: Silvia Zamboni/Valor
Brookfield is willing to invest in projects related to energy transition and low carbon economy. Within that plan, Brazil is one of the main countries in the world with chances to receive multimillion investments in the coming years.
Brookfield’s Global Transition Fund (BGTF) recently raised $15 billion — the largest amount of private capital ever raised to support the transition to a low-carbon economy — and executives are looking to do business in Brazil.
The asset management company has always displaced the investments in power generation. Now, by demand of the investors themselves, it directs the attention also to sectors that can also contribute to the mitigation of emissions.
In an interview to Valor, Brookfield’s head of Renewable Energy and Transition, André Flores, says that the investments are conditioned to an additionality character focused on business transformation, renewable energy and sustainable solutions.
“The funds we invested in before were infrastructure funds more broadly, but investors were looking for funds exclusively dedicated to energy transition. The initial demand for this fund was higher than we expected. Our fundraising goal was $7billion and we ended up with $15 billion,” Mr. Flores says.
The money is not earmarked for any country and is released as local managers find opportunities with good rates of return. Almost half of the amount has already been allocated in large economies such as the U.S., Canada and the UK.
The executive sees no chances of Brazil being left out of this or other funds specific to the energy transition but gives signs that a way to accelerate this would be more regulation and legal security for new technologies.
Brookfield is still looking for opportunities here, but the lack of a legal framework for some segments that are beginning to emerge, such as the carbon market, batteries, and offshore wind power, for example, still hinder more aggressive investments.
“Do I see a carbon capture market in Brazil today? No. But we see some markets out there already developed. The storage market still depends on regulation and clear incentives. Obviously, they can launch a capacity market auction, but there isn’t a remuneration system outside the auction that justifies the investment”, he says.
The executive adds that the demand is also on the part of consumers with increasingly bolder portfolio decarbonization goals with long-term contracts and costs that make clean energy viable.
“In Brazil there is not a specific rule, and nothing is mandatory, such as a carbon tax for companies. So, we note that this is a voluntary movement through consumer pressure and adoption of targets.”
Mr. Flores believes that as soon as this fund is fully invested, the company will present an even larger one, as has been the case with infrastructure funds, which have already launched five. “We bet that Brazil will be the great receiver of these resources in the future.”
Of the R$159 billion in assets under management in Brazil, R$27 billion are concentrated in renewable energies, mainly in hydroelectric and wind power plants under operation by Elera Renováveis. Last year, in buying and selling assets, the amount was R$10 billion in acquisitions and R$5.5 billion in capital recycling activities.
The solar source had a strong debut in the radar of the Brooksfield, and there are already 11 parks under construction, the most important of which the Janaúba plant, the largest solar enterprise under construction, totaling 1.2 GWp of installed capacity and investments totaling R$2.3 billion — in addition to the private equity fund that bought Aldo Solar, the largest distributor of solar equipment.
It seems that the distributed generation segment should be one of the next in line to receive resources, given the growing demand for capital to make the projects viable.
“Our idea is to be builders, owners, and operators of distributed power parks. In this gold rush there are gigawatts of projects with access applications or already underway. I see our entry much more in this,” he expects.
The bottlenecks in the electrical sector are also candidates to receive an important slice of the resources. Brookfield owns Quantum and recently sold 2,420 kilometers of mature transmission lines in the Northeast and Minas Gerais for $834 million to Argo Energia, but has almost twice as much under construction, besides being present in all the auctions of the segment.
The increase in capex in Brookfield’s business, on the other hand, squeezed investors’ margins a bit, mainly due to the rise in commodities and inputs. However, the market reaction fostered a balance, and the prices of long-term contracts followed the movement.
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