Victory Hill Capital Partners LLP

Brazilian Hydro Facility

Sustaining renewable power generation in the Brazilian energy mix

Brazil has one of the world's largest hydrological resources and is a global leader in hydropower generation.

The country has attracted large amounts of capital investment in the hydropower sector making it one of the most established and prominent hydropower markets in the world .The hydropower sector in Brazil is also underpinned by a unique regulatory framework which seeks to mitigate hydrological resource risk for individual hydropower generators.

In 2022, we acquired a 198MW run-of-river hydropower plant from EDP Group (Energias de Portugal). The facility is located in the state of Espírito Santo and has been operational since 1974.

Since it was first commissioned, the hydro facility has been maintained and managed to a very high standard. The energy regulator in Brazil ranks over 140 hydro plants across the country based on a number of factors to assess their quality of operation and has recently ranked this facility as a top 10 hydro plant in Brazil.

This facility benefits from a portfolio of over 30 long-term inflation-linked PPAs with creditworthy counterparts in the regulated utilities market representing c. 85% of the plant's total revenues. It also has the potential to commercialise power with large energy consumers in the self-consumption ("auto-consumo") segment of the energy market.

The operating partner is Paraty Energia Ltda, which combines strong power trading skills with solid operational capabilities. Paraty and Victory Hill have identified several areas for operational improvements that should contribute to generating additional value. Victory Hill is also working with our operating partner to develop community outreach programmes to improve the dialogue with local communities and ensure that our investment activity remains sensitive to the needs of local stakeholders.

Asset Location

Request more information

Reach out to learn more about this asset

Asset Overview

Asset description
Country: Brazil
Technology: Hydro power generation
Capacity: 198 MW
Revenue type(s): Fixed Price PPA / Merchant
Revenue currency: BRL
Investment summary
Committed capital: BRL 708mn / GBP 116mn
Leverage (D/E): 0%
Renewable energy generated: 488,251MWh in H1 2023
Avoided emissions: 45,603 t CO2 per year on average
Pay back: Lifetime embodied emissions were paid back within the first 2 years of operations.

This investment is part of the GSEO strategy – click here to learn more about GSEO