In Brazil, renewable energy accounts for almost 45% of primary energy demand, making Brazil’s energy sector one of the least carbon-intensive in the world. However, Brazil’s reliance on hydropower has been challenged in recent years due to drought, which creates energy shortage and price volatility.
To help diversify the country’s energy mix Scatec ASA, a Norwegian leading renewable energy solutions provider, is starting construction of a 142 MWp solar plant in the Brazilian state of Minas Gerais.
IFU is providing a debt facility of EUR 25 million to partially fund Scatec’s equity share in the project.
Providing electricity for 150,000 households
The project has excellent solar resource and will generate 307 GWh renewable energy per year, equivalent to the annual electricity consumption of over 150,000 Brazilian households.
Electricity offtake will take place through a private 10-year power purchase agreement (PPA) with global energy market operator Statkraft for about 75% of the expected power produced. The remainder is expected to be sold under short, medium and long-term PPAs and spot market.
Taking solar capacity in Brazil to 835 MW
The estimated total capital expenditure for the solar plant is USD 85 million, to be financed by long-term non-recourse project debt covering 35%, and the remainder to be financed by Scatec equity and the short-term facility from IFU. Financial close for the long-term project debt is expected in the first half of 2025, with commercial operations expected to start in the first half of 2026.
“We are very excited to start construction of our third solar project in Brazil, which will take our total capacity in the country to 835 MW. This is our first plant in the southeast submarket where power demand is strong, diversifying and strengthening our Brazilian portfolio. Brazil is one of our core markets, and we will continue to seek opportunities and push the green transition forward.”
Terje Pilskog, CEO of Scatec.
Commitment to gender empowerment
The solar plant site is in a remote rural area in the northeast of Brazil, where employment opportunities are scarce. The project will create jobs during construction and operational stage, including training and employment of female workers. Scatec has past experiences in gender empowerment initiatives from another solar plant in Brazil, which will be used also for this investment.
“IFU is very happy to join hands with Scatec, a strong partner within renewable energy solutions in Brazil and other emerging markets. This investment fits perfect with IFU’s strategy, under which Brazil is a focus country and solar PV a focus sector. With COP29 firming up that the global energy transition is already underway, we are proud to contribute to Brazil’s expansion of non-hydro renewables and look forward to COP30, hosted by Brazil.”
Natalia Svejgaard, Investment Director in IFU.
About Scatec
Scatec is a leading renewable energy solutions provider, accelerating access to reliable and affordable clean energy emerging markets. As a long-term player, Scatec develops, builds, owns and operates renewable energy plants, with 5 GW in operation and under construction across four continents today. Scatec is committed to grow its renewable energy capacity, delivered by passionate employees and partners who are driven by a common vision of ‘Improving our Future’. Scatec is headquartered in Oslo, Norway and listed on the Oslo Stock Exchange. To learn more, visit www.scatec.com.
Photo by Scatec.