Issue coordinated by Itaú BBA is Brazil’s largest operation in this segment
02/29/2024
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Kanastra’s Netto and Solfácil’s Tiret — Foto: Ana Paula Paiva/Valor
Solfácil, a company operating in the solar power industry, has raised R$600 million in Real Estate Receivables Certificates (CRIs) with the asset management company Kanastra. The objective is to enable the financing of photovoltaic projects for individuals and companies.
The issue, coordinated by Itaú BBA, is already the largest operation in Brazil’s self-generation sector, known as distributed generation (DG), a modality that mostly involves contracting solar power on rooftops or in solar farms.
CRIs are securities that generate a credit right for the investor, through a financing instrument designed to finance transactions in the real estate market. The financing was divided into series ranging from 11.51% per year to 20.95% per year. Guillaume Tiret, chief financial officer and co-founder of Solfácil, told Valor that the company will obtain a more attractive cost of capital, which will translate into lower interest rates for end users.
With the issuance of the green CRI, Solfácil has already raised more than R$1.3 billion in the last nine months. In July, the company raised R$418 million through a credit rights investment fund (FIDC). In November, the company raised R$250 million in a securitized financing line with Goldman Sachs, bringing the total to R$1 billion.
“It was important to combine our solar financing with the eligible backing of a CRI to enter a new debt market. It’s a bigger market than FIDCs. We can access individual investors and it’s a fixed-rate market,” said Mr. Tiret.
Kanastra co-founder Manuel Netto added that the company already has experience in different asset profiles, such as supply chain financing, and is now entering a modality with ESG appeal, real economy and a company with a credit history.
The operation links the buyer of the solar panel, who will replace the electricity bill with a debt with a predetermined maturity that will be repaid with funds in the capital market, said Mr. Netto. “The market understood that there was no risk of a credit crisis because of the cases of Americanas and Light. In addition, the policy interest rate continued its downward trend and inflation approached the target, which lowered the cost of money and allowed this type of issuance project to finance more operations.”
For Camila Ramos, president of Clean Energy Latin America (CELA), a consulting firm specializing in the renewable energy sector, CRIs are a popular tool among companies as an alternative to tax-exempt debentures. According to the executive, the funds raised are mainly used to help companies finance a large and widespread volume of consumers who have expensive electricity bills and are betting on the purchase of solar kits as an alternative.
In the case of Solfácil, the company has financed around 20,000 projects through other funds for customers who exchange their electricity bill for part of the financing, and is now transferring its portfolio of existing customers to this CRI. According to data from the National Electricity Agency (ANEEL), Brazil currently has 2.4 million consumer units (UC) equipped with photovoltaic systems. Each UC represents the home of a family, a commercial venue, or any other property served by micro or mini power plants.
Despite being a smaller form of power generation, the segment has increasingly attracted the attention of major players in the industry. The sector currently has more than 27 gigawatts of installed capacity in Brazil, and ABGD, the association that represents companies in the sector, predicts that the segment will reach 35 GW in Brazil by the end of 2024.
Major players include (re)Energisa, Comerc, Grupo Rezek Energia, Raízen, GDSun with BTG funds, among others. In 2023, the sector generated R$26.5 billion in investments. The big announcements were made by the French company GreenYellow, which invested R$330 million in the sector, and the Canadian company Brookfield, which entered the sector with an initial contribution of R$1.2 billion. Pátria Investimentos invested $120 million to launch the operations of a new power company dedicated to distributed generation solar projects.
Portugal’s EDP was even more aggressive, announcing an investment plan of R$13 billion in distributed generation, with the goal of installing an additional 4 GWp of solar projects by 2026. At the beginning of 2024, I Squared Capital bought 49% of the distributed generation company Órigo Energia, with an investment of R$2 billion.
What explains this race for the sun is that former President Jair Bolsonaro’s approval of the legal framework for distributed generation in 2022 created a sense of urgency to ensure that the tariff for using the distribution grid would be free until 2045.
*Por Robson Rodrigues — São Paulo
Source: Valor International