Brazil’s Rio Energy to be under Equinor umbrella in green energy push

Equinor, a leading energy company, has solidified its footprint in the renewable energy sector by acquiring Rio Energy, an eminent onshore renewables firm in Brazil, from Denham Capital.

The purchase includes selected assets and the team, with Denham Capital retaining certain assets, bolstering Equinor’s position in the Brazilian market.

Equinor’s executive vice president for Renewables, Pål Eitrheim, elaborated on the strategic move, stating, “Through Rio Energy, Equinor will take a leading position in the rapidly growing Brazilian renewables industry. It accelerates production and cash flow, gives us a strong platform for growth, and adds capabilities and an attractive project pipeline.”

The acquisition aligns with Equinor’s broader strategy of fortifying its onshore renewables business through local acquisitions.

Equinor has demonstrated a proactive approach to renewable investments, backing companies such as Wento in Poland, BeGreen in Denmark, Noriker Power in the UK, and East Point Energy in the US. The incorporation of Rio Energy is anticipated to boost Equinor’s portfolio development and buttress its standing as a diversified energy company in Brazil.

Veronica Coelho, Equinor’s country manager in Brazil, highlighted the advantages of the deal, stating, “By building an attractive renewables position in the country, together with a robust oil and gas portfolio, we are supporting Brazil’s ambitions towards a diverse energy mix.”

Post-acquisition, Equinor will acquire a full 100% stake in Rio Energy, retaining the current management and around 140 employees. The purchased portfolio includes the Serra da Babilonia 1 producing onshore wind farm in Bahia, a pre-construction solar PV portfolio, and a pipeline of about 1.2 GW of onshore wind and solar projects.

Rio Energy will function as a wholly-owned Equinor subsidiary, with the team continuing to expand its current portfolio. The acquired projects are expected to yield high returns, in line with Equinor’s forecast of 4-8% for renewables projects. The energy produced will be managed by Equinor’s energy trading house, Danske Commodities (DC), which recently set up a trading office in São Paulo.

Olav Kolbeinstveit, Equinor’s senior vice president for onshore and markets within Renewables, commented on the country’s potential, “Brazil is the largest power market in South America, with expected demand growth and fast expansion of the deregulated market.”

The deal is currently pending relevant regulatory approvals.