The Mendubim solar complex broke new ground in Brazil’s renewable energy market by structuring its project financing around a power purchase agreement (PPA) denominated in foreign currency.

The 531 megawatt project, sponsored by Scatec, Hydro Rein and Equinor and located in the Rio Grande do Norte state, will provide energy for 20 years to Alunorte, an aluminum plant owned by Norsk Hydro that exports its production.

Mendubim is composed by 13 photovoltaic plants with a capacity of 452 megawatt, a 6km transmission line and interconnection facilities. It is scheduled to start producing this year.

“Once operational, Mendubim will be among the 5 largest photovoltaic plants in Brazil and will generate a total of 1.2TWh per year, helping to power the equivalent of some 620,000 households in Brazil,” says Axel Holmberg, Brazil country manager and SVP of LatAm business development at Scatec. “With approximately 3 million tons of carbon dioxide equivalents avoided, we showcase the potential solar energy has in contributing to Brazil’s net zero pathway.”

Alunorte will purchase 60% of the energy produced, and the remaining 40% will be sold in the Brazilian non-regulated market through the national grid.

With the PPA aligned, Scatec and its partners were able to secure $243 million in non-recourse project financing from IDB, BNP Paribas and Banco Santander.

The IDB provided $130 million via an 18-year loan, charging the US Secured Overnight Financing Rate, SOFR, plus 3.15% a year. BNP Paribas and Santander contributed $60 million and $53 million, respectively, in 15-year loans, charging SOFR plus 3.05%.

The total cost of the plants is $430 million, with the remainder being financed through equity from the partners.

The deal, which wins the award for Renewables Financing of the Year, represents the largest and longest US dollar financing for a renewable project in Brazil and, importantly, paves the way for future US dollar PPAs in the country.

“The USD financing package together with a USD linked self-production PPA is the first of its kind in Brazil”, Holmberg says. “The PPA was an important component in making the project bankable as it provides for a secure revenue stream.”

He adds that the project strengthens Scatec’s commitment to the Latin American market, and especially to Brazil.

“As of late 2022, we unveiled our updated strategy to the market, marking a significant move towards a more regional focus, with Brazil pinpointed as a key focus market in Latin America,” Holmberg says.

Sponsors: Equinor, Hydro REIN, Scatec

Banks: BNP Paribas, IDB Invest, Santander, Citi

Law Firms: Allen & Overy, White & Case , Hinckley Allen, Machado Meyer, Dias Carneiro, Pinheiro Neto

All supporting financial institutions and law firms were transmitted to LatinFinance by the award category winners. For updates please email