UAE’s Mubadala Capital plans $13.5bn biofuels investment in Brazil: FT

Abu Dhabi’s Mubadala Capital is set to embark on a substantial investment venture in Brazil, allocating approximately $13.5bn over the next decade.

This project is part of broader initiatives for the South American nation, which include the establishment of a new stock exchange.

The UAE sovereign wealth fund’s asset management arm has been expanding its presence in Brazil, venturing into various sectors such as transportation infrastructure, education, and even fast-food franchises.

Renewable fuels

Mubadala Capital said it aims to pioneer the production of renewable diesel and sustainable aviation kerosene through a flagship biofuels project in Brazil.

In an interview with the Financial Times, Mubadala Capital’s Brazil chief Oscar Fahlgren revealed details of the project, highlighting plans for multiple bio-refineries with significant processing capacities.

These facilities will primarily utilise non-food plant matter for fuel production, tapping into Brazil’s agricultural expertise and favourable climate conditions.

The project, led by its energy company, Acelen, will encompass five modules. The first module is slated to commence production by the end of 2026.

Each module will feature a new bio-refinery with the capacity to process 20,000 barrels of fuel per day, along with associated infrastructure and cultivated areas for growing the input crop. Fahlgren emphasised Brazil’s agricultural prowess, highlighting its climate and fertile soil as advantageous factors for the project.

The initiative also involves repurposing an existing oil refinery in the northeastern state of Bahia, acquired from state-controlled Petrobras in 2021.

The investment scheme will also involve repurposing an existing oil refinery acquired from Petrobras, Brazil’s state-controlled oil company. Funding for this endeavor, totaling $13.5bn, will be sourced through a combination of equity and debt over the next five to ten years.

Brazil in focus

This initiative underscores Mubadala Capital’s commitment to green energy transition and represents a significant addition to its existing $6bn investment portfolio in Brazil.

Moreover, Mubadala Capital‘s involvement extends beyond the energy sector, encompassing diverse ventures such as financial assets trading platforms and fast-food franchises.

The establishment of a new football league and discussions for potential exits from mature assets further reflect the fund’s optimism about Brazil’s investment climate.