Brazilian electric utility company EDP Energias do Brasil S.A has agreed to sell the 198MW Mascarenhas hydroelectric facility in the state of Espírito Santo to VH Global Sustainable Energy Opportunities (GSEO) for BRL 1,225 million.
Mascarenhas has been operational since 1994 and has an estimated remaining useful life of 45 years. The project has significant power purchase agreements in place with local utilities.
GSEO is to appoint Paraty Energia Ltda as its local operating partner for the project, with Paraty to hold a minority equity position and receive performance incentives for managing the facility. Paraty is an active participant in the Brazilian energy sector specialising in energy trading, project advisory and operations. The company was established in 2020 and GSEO says that it has a strong operating track record.
“The acquisition of Mascarenhas marks our first investment in hydro power and provides us with a highly reliable source of power generation backed by long term secure PPAs,” commented Eduardo Monteiro, Co-Chief Investment Officer of Victory Hill, GSEO’s investment adviser. “The preconditions to enabling more penetration of wind and solar power capacity in the Brazilian energy mix are well established and strongly underpinned by government policies and the significant contribution of hydro power. Hydro power generation is one of the oldest and most proven power generation sources, complementing more intermittent renewable sources such as wind and solar and ultimately facilitates the presence of such energy sources in the energy mix. We look forward to working with the Company’s new operating partners to maximise the contribution of this asset to the portfolio.”