"Through Rio Energy, Equinor will assume a leadership position in Brazil's rapidly growing renewable energy industry. It accelerates production and cash flow, provides us with a solid platform for growth, and adds capabilities and an attractive pipeline of projects," said Pål Eitrheim, Executive Vice President of Renewables at Equinor.
The transaction is in line with Equinor's strategy, which includes growing its onshore renewables business in selected markets through the acquisition of local companies with high-quality equipment and project pipelines. In recent years, Equinor has invested in companies such as Wento in Poland, BeGreen in Denmark, Noriker Power in the UK and East Point Energy in the US.
Following the transaction, and after Denham Capital divests of certain assets, Equinor will have a 100% stake in Rio Energy and will retain the current management team and a total of around 140 employees.
The acquired portfolio consists of the 0.2 GW Serra da Babilonia 1 onshore wind farm located in the northeastern state of Bahia, a 0.6 GW solar photovoltaic pipeline in the pre-construction phase, and a portfolio of wind and onshore solar projects of approximately 1.2 GW.
Equinor expects the acquired project portfolio to have a return of between 4 and 8%.
The energy produced is expected to be managed in the Brazilian energy market by Danske Commodities (DC), an energy trading company 100% owned by Equinor. DC has recently established a commercial office in São Paulo to support Equinor's activity in the country
"Brazil is the largest energy market in South America, with expected growth in demand and rapid expansion of the liberalized market. By building a DC-managed energy portfolio in Brazil, we can increase value in line with our strategy of a market-driven energy producer," says Olav Kolbeinstveit, Equinor's senior vice president for onshore and renewable markets.
The transaction is subject to applicable regulatory approvals.
