Equinor has made final investment decision on the 531 MW Mendubim solar project in Brazil.
The project underpins Equinor’s ambitions to accelerate growth in renewables and develop as a market-driven power producer in selected markets.
Mendubim is developed as a joint venture between Scatec, Hydro Rein and Equinor, and is located in the state of Rio Grande do Norte.
All three partners have an equal economic interest of 33.3% in the project and will jointly provide engineering, procurement and construction (EPC) services. Operation and maintenance as well as asset management services to the power plant will be provided by Scatec and Equinor.
Mendubim is Equinor’s second large scale solar project in Brazil, following the 162 MW Apodi solar plant that was put in operation in 2018 in partnership with Scatec.
“With the Mendubim project, we expand our investments in renewables in Brazil considerably, and take an important step towards building a material solar portfolio in the country. From 2024 onwards, Mendubim will annually produce around 1.2 TWh of power, which is equivalent to electricity consumption of 620,000 Brazilian households. Construction phase will create more than one thousand direct and indirect jobs,” says Olav Kolbeinstveit, senior vice president for power and markets within Renewables at Equinor.
Total project capital expenditure (capex) is estimated to be around USD 430 million. The asset will be funded by a combination of project financing and equity contribution from partners.
Mendubim will deliver real project-based returns in Equinor’s expected range for renewables of 4-8%.
Around 60% of the produced power will be sold on a 20-year USD-denominated power purchase agreement (PPA) with Alunorte, one of the world’s leading suppliers of alumina for the aluminium industry.
The remaining 40% of the production will be sold in the power market in Brazil. The power trading services are expected to be provided by Hydro Energia and Equinor’s wholly owned energy trading house Danske Commodities. Danske Commodities have recently established a trading office in São Paulo to support Equinor’s activity in the country.
“Equinor has conducted business in Brazil for over two decades, and we see the country as a core area for safe and sustainable long-term growth. We are working to build a diversified energy offering with a robust oil and gas portfolio and an attractive renewables position. Mendubim will be an important milestone for Equinor’s ambitions of being a leading company in the energy transition”, says Veronica Coelho, Equinor’s country manager in Brazil.
Equinor positions within solar
Equinor is in the process of building a profitable solar portfolio in selected markets.
- Equinor’s first step into solar energy was the 162 MW Apodi Solar plant in Brazil. Equinor has a 43.5 % share in Apodi along with operator Scatec. The plant started production in 2018.
- In summer 2022, early phase construction works started in the 531 MW Mendubim solar project, realized in partnership with Scatec and Hydro Rein. Equinor has 33.3% in the project.
- Equinor has a 50% interest in the 117 MW Guañizuil II A solar project in Argentina. The plant is operated by Scatec and started production in July 2021.
- In 2021, Equinor acquired Polish solar developer Wento and its 1.6 GW pipeline of solar projects across Poland. The first solar plant St?pie? was ready in October 2022, and two more are under construction.
- In November 2022, Equinor signed an agreement to acquire Danish solar developer BeGreen. BeGreen has a project pipeline in early to medium stages of maturity of over 6 GW in Denmark, Sweden and Poland. The transaction is subject to relevant regulatory approvals.
Equinor in Brazil
Equinor has conducted business in Brazil since 2001, and the country is considered one of the core areas for Equinor. Equinor has a solid and diversified oil & gas portfolio in Brazil, with licenses both under development and in production such as Bacalhau, in Santos basin, and Peregrino, in Campos basin. Within renewables, the first solar plant in Equinor’s global portfolio, the Apodi solar plant, is located in the state of Ceará.