A recent agreement between EDP Brazil, the Brazilian energy giant, and Global Sustainable Energy Opportunities (GSEO), a London-based investment company, will see the UK investor take possession of a hydroelectric facility.
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Located in Espírito Santo, the facility has been operating since 1974 and is classed as a run-of-river asset. The hydropower plant currently has long-term power-purchase agreements (PPAs) in position, with local utility companies that generate over 60 per cent of its revenues. The sale is one part of a specific strategy by the parent company of EDP Brazil, Energias de Portugal, designed to expand the investments it makes in solar power generation.
The London-listed investment company GSEO expects that the plant will provide robust cashflow as the plant’s useful life is currently estimated at 45 years. GSEO plans to appoint Paraty Energia, one of Brazil’s active participants in the energy sector, as its dedicated local operating partner. The local operator will acquire a minor stake in the facility.
The 198MW hydropower plant based in Brazil known as The Mascarenhas will be sold for the price of $235 million. Completion of the recent deal is subject to the necessary regulatory approvals.
