In Brazil, renewable energy accounts for almost 45 per cent 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 constructing a 142 MWp solar plant in the Brazilian state of Minas Gerais.
Providing electricity to 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 per cent 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 per cent, and the remainder to be financed by Scatec equity and the short-term facility from Impact Fund Denmark. 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.
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.