Riyadh: Brazil’s biofuel sector is poised for significant expansion with UAE’s Mubadala Capital committing to invest $13.5 billion over the next decade.
Oscar Fahlgren, head of Brazil strategy at the sovereign wealth fund, revealed this investment plan in an interview with the Financial Times. He outlined the fund’s strategy to produce renewable diesel and sustainable aviation kerosene primarily from non-food plant matter.
Fahlgren disclosed that Mubadala’s Brazilian subsidiary, Acelen, will kickstart the development of a large-scale biofuel project by 2026. The funding for this initiative will be sourced through a combination of equity and debt over a period of five to ten years. The project will comprise five modules, each valued at $2.7 billion, housing a new biorefinery capable of processing 20,000 barrels of fuel per day, along with the necessary infrastructure and cultivated acreage for the input crop.
Highlighting Brazil’s agricultural prowess due to its favorable climate and fertile soil, Fahlgren likened Brazil’s significance in agriculture to Abu Dhabi’s importance in oil. The project will also involve the conversion of an existing oil refinery in Bahia, Brazil, acquired from government-owned Petrobras in 2021.
Fahlgren emphasized the project’s significance, expressing optimism about investing in Brazil’s green energy transition space. Mubadala’s venture into bioenergy will build upon its existing $6 billion investments in Brazil, which represent approximately a quarter of the group’s global portfolio.
In addition to its bioenergy venture, Mubadala plans to establish a stock exchange in Brazil next year through its Americas Trading Group. Fahlgren sees this as a necessary step given Brazil’s size and the potential for growth in the financial market segment.
Mubadala’s asset management arm is increasingly bullish on Brazil’s investment climate, with investments ranging from metro lines and medical universities to a majority stake in the local owner of the Burger King brand. Fahlgren expressed confidence in the current investment climate in Brazil and hinted at potential exit opportunities for mature assets in the near future.
