The 531 megawatt (MW) solar is being realized in a partnership between renewable energy solutions providers Scatec, Equinor ASA and Hydro Rein.
The companies have signed a 20 year USD denominated power purchase agreement (PPA) with Norsk Hydro’s alumina refinery Alunorte in the state of Para for approximately 60 percent of the expected power produced. The remaining volumes will be sold in the Brazilian power market. The partners are now placing orders for key components and starting site preparation activities.
The estimated total capital expenditure for the project is USD 430 million to be financed by a mix of non-recourse project debt and equity from partners. Financial close and the first disbursement of project finance debt are expected within the end of 2022.
“Brazil is leading the way within solar energy in Latin America and we are very pleased to take part in this development together with Equinor and Scatec. Mendubim enables further decarbonization of Alunorte, which is key to reach Hydro’s target of a 30 percent CO2 reduction by 2030,” says Olivier Girardot, Head of Hydro Rein.
“This investment is a key milestone in delivering on our strategy and will strengthen our position in a major renewable energy growth market with strong partners including Equinor and Hydro Rein. Brazil’s solar energy market is expected to further accelerate and we are pleased to move ahead with this exciting project that will help to power 620,000 households in Brazil,” says Scatec Chief Executive Officer, Terje Pilskog.
All three partners have an equal economic interest of 33.3 percent in the project and will jointly provide Engineering, Procurement and Construction (EPC) services. Scatec will provide operation and maintenance as well as asset management services to the power plants together with the partners.
Hydro Rein was established in 2021 as part of Hydro’s strategy to grow in renewables. The company aims at becoming the preferred supplier of renewable power and other energy solutions for industrial clients.
Hydro Rein has a significant pipeline of wind and solar projects in Brazil and the Nordics for long-term power supply to Hydro and other industrial offtakers. Hydro Rein is also developing a range of energy solutions to assist industries with the management and optimization of its energy consumption and storage behind-the-meter.