Atlas Renewable Energy, a leading international renewable energy company, announces that it has secured a loan of USD 210 million from Banco Nacional de Desenvolvimento Econômico e Social (BNDES) to finance its Boa Sorte solar project. This marks the first time that BNDES has executed a US dollar-indexed loan to a renewable energy project.
“We hope that this is the first of many operations in which the BNDES can finance companies using the dollar as a reference. This is the bank expanding its range of products and seeking to better serve its customers,” said the Infrastructure Credit Director, Solange Paiva Vieria.
This financing is of great importance for the Brazilian market and for the renewable energy industry in the country. It sets a new precedent for project financing in Brazil, making it available for projects with USD-denominated power purchase agreements (PPAs) specifically designed for large Brazilian companies which are large exporters. The deal is also particularly significant given the new regulation under Law # 14,286 / 2021 that allows exporters to enter into USD PPAs with companies that hold authorizations, which is the case of energy trading companies.
“This is the third USD deal for Atlas in Brazil to finance renewable energy projects that will serve large energy consumers in the country, but it is worth noting that this is particularly unique since it has been issued by a public bank,” said Luis Pita, General Manager for Atlas Renewable Energy in Brazil. Pita also added: “The fact that BNDES has issued this loan is a testament to the growing importance of renewable energy globally and in Brazil and the significant role that companies like Atlas are playing in driving this transition. We hope that this financing will facilitate new USD-indexed financing for renewable energy projects in the country and help to drive the transition to a more sustainable energy future.
“With the introduction of Law 14,286/21, known as the Foreign Exchange Law, as of December 31, 2022, agents in the electricity sector will be able to trade energy through PPAs (Power Purchase Agreements) linked to the dollar. This new framework allows electro-intensive exporting companies to reduce their risk to exchange rate fluctuations, given that their products are traded in dollars and the electricity consumed, being an important input to produce goods, can also be purchased at prices linked to the dollar,” detailed Daniel Barreto, superintendent of the BNDES Energy Area. “This new model requires the feasibility of financing also pegged to the dollar, and anticipating this new reality, BNDES, through fundraising abroad, innovatively made possible the financing operation for the Boa Sorte solar project, from the Atlas Group,” added Barreto.
“We are very excited to partner with BNDES on its first dollar-indexed financing for renewable energy. Having financing indexed to the dollar is not only in the interest of investors, but a crucial prerequisite for making the Boa Sorte project viable. The support from BNDES attests to the importance of the Boa Sorte project, supporting Hydro REIN’s industrial decarbonization mission” said Marcela Jacob, Head of Hydro Rein Brazil.
The Boa Sorte solar project will be built in Paracatu, in the State of Minas Gerais, Brazil. It will provide clean energy to a client from the Brazilian industrial sector, under a 20-year Power Purchase Agreement (PPA). The plant will have an installed capacity of 438 MW, which will generate 815 GWh annually. This is equivalent to providing clean energy to more than 394,000 homes and offsets more than 61,000 tons of CO2 emissions per year. The project also stands out for its novel contract structure through a joint venture between Atlas, HydroRein, and the client under a self-production contract to supply 12% of the client’s annual power consumption.
The project will continue to foster Atlas’ approach to social responsibility within the nearby communities by providing jobs to the local workforce, estimating at least over 2000 people hired during construction. Atlas will also implement the “we are all part of the same energy” program to train local women in technical skills and will mobilize its contractors to reduce the gender gap within the construction of the plant and promote new capacities and skills within the local female workforce.
With the financing of the Boa Sorte solar plant, Atlas continues to pioneer and innovate within the renewable energy industry working alongside reputable banking institutions by offering custom-made solutions for large energy consumers looking to optimize energy costs and meet their sustainability targets.