Brazil-based renewable energy company Omega Geração SA has entered into a binding agreement to acquire a 50 per cent stake in wind farms owned by France’s EDF Renewables in the Brazilian state of Bahia. EDF Renewables is a wholly owned subsidiary of the French utility EDF Group.
According to a statement issued by Omega, the assets in the Ventos da Bahia 1 and 2 complexes have a 182.6 MW capacity across seven wind farms and the deal is valued at 661.7 million reais ($118 million), with Omega paying 55 per cent in cash and the rest by taking over long-term debt. Fully operational since 2018, the plants have long-term power purchase agreements (PPAs). It added that it was in talks to buy additional wind farms with 265 MW in capacity and has until December to make an offer. The company has also stated that its partner Omega Desenvolvimento is in advanced negotiations that could lead to the implementation of wind projects of approximately 200 MW of capacity.Closing of the transaction is subject to customary conditions, including approval by project lenders and Brazil’s Administrative Council for Economic Defense (CADE).
Omega’s latest move follows the purchase of operational wind farms from Eletrobras for 1.5 billion reais, including debt, announced at the end of July. The plants, in Rio Grande do Sul, total 582.8 MW capacity. Omega had previously closed a deal for a share of EDF in the Pirapora solar complex.
Currently, Omega has wind, solar and small hydro plants with around 1.19 GW in capacity. With the purchase of Eletrobras plants, which should be completed by the end of 2020, it will reach 1.7 GW. Further, with the latest deal to acquire stake in EDF’s assets in Brazil, the company will approach 1.8 GW generating capacity, while business in the pipeline could eventually lead it to exceed 2 GW.
REGlobal’s Views: Brazil is the third largest renewable energy market in the world, behind China and the United States. Wind power became Brazil’s second largest (after hydropower plants) source of electricity in 2019 and is headed for a significant growth in coming years. Industry consolidation is therefore likely to increase with existing players trying to strengthen their position in the market.