Brasol doubles investments: solar energy is making leaps in Brazil!

Brasol doubles investments: solar energy is making leaps in Brazil!

Brasol, a Brazilian renewable energy company, has big plans to significantly expand its business in the solar energy sector. This move is underpinned by massive financial support from major investors such as Siemens and BlackRock. According to recent reports, the company plans to more than double its investments this year, with a total planned volume of up to 2 billion reais (approximately $354.6 million) for 2024. Last year, investments were around 900 million reais. CEO Ty Eldridge expressed the intention to continue to increase these investments in the coming years and sees the expansion of the solar energy business as a central part of the company's strategy. The target customers here are in particular industrial plants that should benefit from the expanded services.

Eldridge notes that the energy sector in Latin America's largest economy has a "bottleneck" that Brasol wants to overcome through targeted investments. The focus is on expansions in the areas of customer service, batteries and power lines, including the construction of private lines and substations. To realize these ambitions, the company has announced an initial simple bond issue of R$400 million. These funds will be used to build or acquire new solar farms as part of the growth plan. Bradesco BBI advised Brasol on this transaction.

Financing and future projects

The funds highlighted by Eldridge are crucial for the development of strategic assets and new projects. The company is also exploring battery storage solutions and plans to reach approximately 500 megawatt-peak (MWp) capacity by the end of 2025. 150 MWp have already been installed in 22 states. In addition, Brasol recently signed an agreement to acquire solar farms from BC Energia, comprising 13 projects with a generation capacity of 60 MW and requiring investments of R$250 million.

Some of the funds will be used for equipment purchases, facility construction, and mergers and acquisitions. The distributed energy generation market in Brazil is consolidating around key players such as Brookfield and Origo, among others, who are also making large investments in solar projects. At the end of 2023, BlackRock acquired a 45% stake in Brasol to invest approximately R$1 billion in the company.

Future prospects

The plan envisages the acquisition of 35 solar parks, requiring investments of R$800 million. These moves indicate a growing interest in renewable energy sources and a strategic focus on sustainable infrastructure projects. Camila Ramos, CEO of Clean Energy Latin America (CELA), highlights that district energy production projects use different financing instruments, which contributes to the stability of the sector.

Although distributed energy financing volumes in Brazil fell for the first time in 2023, a revival is expected in 2024, indicating the potential and momentum in the renewable energy sector in Brazil. Brasol is on a promising path to meeting the challenges in the energy sector and securing the company's future direction through strategic investments. Further information about Brasol's activities and projects can be found on the websites of Reuters and Valor International.