Total Eren focusing on power purchase agreements in Brazil
Total Eren recently announced that it secured financing of 423mn reais (US$76mn) from Banco do Nordeste (BNB) for its Terra Santa and Maral wind power plants in Brazil’s Rio Grande do Norte state.
Both projects have 20-year private power purchase agreements (PPAs) and are expected to be commissioned by mid-2021. They will have capacity to generate 720GWh/year, enough to supply 400,000 homes.
In addition to Terra Santa and Maral, Total Eren owns three solar PV plants in operation in the country: the 90MW Dracena, the 25MW BJL 11, and the 25MW BJL 4. These also benefit from a 20-year PPA signed with the electric power commercialization chamber (CCEE).
“We expect the free market to continue to grow, particularly through long-term private PPAs in both solar and wind,” Pierre-Emmanuel Moussafir, managing director of Total Eren Brazil told BNamericas.
BNamericas: How does Total Eren see the energy market scenario in Brazil? What are the perspectives?
Moussafir: The Brazilian renewable energy market offers a high growth potential, and we are convinced that this is the start of a promising trajectory for Total Eren in this country.
We are witnessing the expansion of the free market which has allowed the renewable market to grow despite the pandemic. Solar installed capacity is rapidly increasing and is slowly catching up to wind in terms of volumes and prices.
We expect the free market to continue to grow, particularly through long-term private PPAs in both solar and wind.
BNamericas: What are the company’s main projects under development and in operation?
Moussafir: Total Eren owns 300MW in Brazil, including 140MW of solar power plants in operation and 160MW of wind capacity under construction.
Total Eren is pursuing both public and private PPA opportunities to fuel its growth in Brazil, a key market for the company’s development in Latin America.
BNamericas: What is the growth forecast in terms of installed capacity?
Moussafir: Total Eren does not communicate on target growth per country. However, at the global level, Total Eren owns more than 3.3GW of solar and wind power plants in operation or under construction, and aims to achieve a global gross installed capacity of more than 5GW by 2022.
BNamericas: Which energy sources will be prioritized?
Moussafir: We can provide our expertise in both solar and wind and we understand that each market or consumer may benefit more from one source or another.
BNamericas: Is the company interested in offshore wind in Brazil? Are projects being discussed with potential partners?
Moussafir: For now we are not considering offshore wind in Brazil.
BNamericas: Does Total Eren see synergies with offshore oil and gas undertakings, like a wind plant supplying a production platform?
Moussafir: We have several synergies with Total in Brazil, primarily regarding corporate matters, communication, and client relationship management rather than offshore aspects at this stage.
BNamericas: How much does the company plan to invest in Brazil?
Moussafir: Total Eren does not communicate on target growth per country.
BNamericas: Has Total Eren obtained financing from other financial institutions in Brazil apart from BNB? If so, which ones?
Moussafir: So far in Brazil, Total Eren has financed its first two solar projects (BJL 11 and 4) with BNB, BNP Paribas and Itaú; its third solar project (Dracena) through the issuance of a long-term debentures subscribed by Kinea; and its two wind projects (Terra Santa and Maral) with BNB, Santander, Sumitomo and Banco do Brasil.
BNamericas: Is Total Eren negotiating new financing deals for Brazilian projects?
Moussafir: Total Eren is constantly evaluating financing and refinancing conditions, but no new financing is being negotiated at this stage.
BNamericas: Is Total Eren's commercialization strategy focused on the regulated or the free market? What about PPAs?
Moussafir: Total Eren is currently working on private PPAs in the free market environment but does not exclude the possibility that it may participate in future auctions.
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