Macquarie Asset Management's Green Investment Group (GIG) and Hydro Rein, a subsidiary of Norsk Hydro, have jointly announced their final investment decision on the Feijao onshore wind project in Brazil, with a capacity of 456MW.
GIG revealed in a statement hat the project has successfully raised a total of $290 million in debt financing from seven prominent commercial banks. This funding was secured for the $700 million wind project, with GIG and Hydro Rein holding 50.1% and 49.9% of the project equity, respectively.
The financial institutions involved in this milestone deal include Citibank, JPMorgan, HSBC, BNP, SocGen, Natixis, and Santander. Notably, this marks the first Brazilian renewables project, denominated in US dollars, to secure project financing exclusively from commercial banks, without the involvement of a development bank.
The Feijao project is situated in the northeastern states of Piaui and Pernambuco in Brazil and has been developed in collaboration with Casa dos Ventos, a prominent Brazilian renewable energy developer. Once operational, approximately 75% of the generated power will be supplied to Norsk Hydro's Paragominas bauxite mine and Alunorte alumina refinery through long-term power purchase agreements. The remaining power will be sold on the open market.
The wind farm will comprise 80 Nordex 5.7MW turbines, and delivery and installation are scheduled to commence in autumn 2023. The funding will also encompass the necessary infrastructure for the wind project, including substations and a 50km transmission line.
Construction is presently underway, and operations are anticipated to commence in 2024.
In addition to the Feijao wind farm, GIG and Hydro Rein have secured the rights to develop a solar farm with a potential capacity of up to 130MW as part of the same venture.
Eric Bjonerud, Managing Director of GIG, emphasized the significance of the project's financing, highlighting the growing maturity of the local renewables market and its potential to foster further project development in the region. He stated, “The banks chose to work on this because they had the desire to open up a new marketplace in a new way.”
Bjonerud also underscored the collaborative effort between GIG and Norsk Hydro, stating, “It's a great chapter in the story of the GIG and Norsk Hydro relationship, which took successful products from Norway and brought them to a different country to try and help decarbonize one of the world's biggest consumers of energy.”
The Feijao onshore wind project stands as a notable milestone in Brazil's renewable energy landscape, showcasing the successful collaboration between international partners and their commitment to driving sustainable energy solutions in one of the world's largest energy-consuming nations.
