Norwegian companies Scatec, Equinor and Hydro Rein have started construction of the 531MW Mendubim solar farm in the state of Rio Grande do Norte, Brazil.
The companies have also signed a 20-year US dollar-denominated power purchase agreement (PPA) with Alunorte, a supplier of alumina for the aluminium industry, for approximately 60% of the expected power produced.
The remaining volume will be sold in the Brazilian power market.
The partners are now placing orders for key components and starting site preparation activities.
The estimated total capital expenditure for the project is $430m to be financed by a mix of non-recourse project debt and equity from partners.
Financial close and the first disbursement of project finance debt are expected by the end of 2022.
Scatec chief executive Terje Pilskog said: “This investment is a key milestone in delivering on our strategy and will strengthen our position in a major renewable energy growth market with strong partners including Equinor and Hydro Rein.
“Brazil’s solar energy market is expected to further accelerate, and we are pleased to move ahead with this exciting project, that will help to power 620,000 households in Brazil.”
Hydro Rein head Olivier Girardot said: “Brazil is leading the way within solar energy in Latin America, and we are very pleased to take part in this development together with Equinor and Scatec. Mendubim enables further decarbonisation of Alunorte, which is key to reach Hydro’s target of a 30% CO2 reduction by 2030.”
All three partners have an equal economic interest of 33.3% in the project and will jointly provide engineering, procurement and construction services.
Scatec will provide operation and maintenance as well as asset management services to the power plants together with the partners.