Wind energy in Brazil: Sale by Suzlon of a wind farm

The transaction identified new players interested in growth opportunities in Brazil’s wind power market. PINE, a wholesale bank focused on long-term relationships with companies, acted as advisor on the sale by Suzlon, an Indian wind-turbine manufacturer, of five wind farms located in the Brazilian state of Ceara. PINE acted as the financial advisor retained by the equipment maker, which has a plant located in the country’s Northeast and commercial offices located in Sao Paulo.

The private-equity fund FIP IE Banco do Brasil (BB) Votorantim Energia Sustentavel I, II, e III and Enerplan, a company based in the state of Rio Grande do Sul, were the buyers identified by the structured operations team at PINE. They paid R$540 million to assume the entire wind generation project, which has installed capacity of 136.5 MW.

Suzlon, the world’s fifth-largest maker of wind turbines and blades, will remain the supplier of generation equipment to the Faisas Wind Farm. The Faisas Wind Farm is licensed for the commercial operation of wind generation activities in the municipality of Trairi, located 150 kilometers from Fortaleza, which is the state capital of Ceara.

PINE has been working on the project since late 2011, when it was contracted by Suzlon to sell the assets. According to Orestes Goncalves Junior, director of structured operations at PINE, "We were able to map the wind power sector in record time and identify synergies with investors, such as the BB Votorantim Fund and the Oleoplan group, which is the parent company of Enerplan, a company recently created to explore opportunities in the wind power industry."

On Friday (March 9), a firm proposal was signed with the fund BB Votorantim, which will hold a 60% interest in the Suzlon project, and with Enerplan, which will hold the remaining 40%, according to Diego Velho, Enerplan’s senior finance executive. Enerplan already has two wind power projects located in the city of Viamao in the interior region of Rio Grande do Sul.

The Faisas Wind Farm was originally developed by the Portuguese group Martifer, when it acquired the right of commercialization of energy in the reserve auction held in 2009, but which ultimately sold the assets to Suzlon in the second half of last year. "We have been involved in the project since the beginning and even participated in the auction," said Arthur Lavieri, CEO of Suzlon in Brazil.

PINE’s played a fundamental role in concluding the transaction in accordance with best market practices, said Orestes Goncalves Junior. "We utilized our teams dedicated to infrastructure business in the M&A area in order to carry out one of the biggest operations in the wind power industry this year, as well as identify the new players in this competitive market. We are very satisfied with the results achieved, which demonstrate the bank’s capacity to handle deals for its clients and partners."