Financing of $21M Secured for Wind Farm Project in Brazil

Source: 1/27/2021, Location: South America

A Danish 94 MW wind project in Brazil is secured with a USD 21 million loan. It is the first loan agreement signed by IFU through Denmark’s Green Future Fund. The project was developed by Nordic Power Partners (a partnership between IFU and European Energy) and consists of three individual wind farms using Vestas wind turbines.

In the north-eastern Brazilian state of Pernambuco, one of the poorest regions in the country, European Energy is about to build three new wind farms of 94 megawatts in total. It has become a reality after financing secured with a USD 21 million loan from the part of Denmark’s Green Future Fund managed by IFU. It is the first loan granted by IFU under the new fund of a total of USD 4 billion, established by the Danish government in 2019.

– The objective of Denmark’s Green Future Fund is for Denmark to contribute to the green transition globally and at the same time promote the sale of Danish climate technology. This project checks all the boxes, as it was developed in Denmark, financed primarily by Danish stakeholders, uses Danish technology from Vestas and contributes to reducing the global carbon footprint, said Torben Huss, CEO of IFU.

- Denmark should be a “green superpower”. With this wind farm, we are first and foremost making a green investment in one of the poorest regions in Brazil. But just as importantly, we are taking the lead and pulling the entire country in the green direction. The Danish Government wishes to turn the green financing tide from black to green. And supporting investments in e.g. wind energy is exactly what will set the world on the right climate track towards fulfilling the Paris Agreement. We must have the courage to assume an international leadership role for the global climate effort and a just global transition towards sustainable societies, said Flemming Møller Mortensen, Minister for Development Cooperation

European Energy in charge of implementation
European Energy is very experienced within establishment of wind and solar energy facilities, and they are responsible for implementing the project, which consists of three individual farms, Ouro Branco I & II and Quatro Ventos. The wind farms are expected to become operational end of 2022.

- Brazil’s development is accelerating, and the country plans to install more than 28 GW wind energy by 2026. I am pleased that we can expand and strengthen our position in Brazil with this agreement. With this project, we are bringing European Energy’s extensive wind project experience to Brazil, and at the same time we are expanding our project. We should not underestimate the possibility of projects like this leading to new business opportunities in Latin America, said Jens-Peter Zink, Executive Vice President in European Energy.

The project was developed by Brazilian developer Eólica Tecnoligia and Nordic Power Partners, a development company owned jointly by European Energy and the Danish Climate Investment Fund, which is managed by IFU and partly financed by Danish pension funds.

The USD 21 million loan represents close to 20 per cent of the total construction costs. Vestas will supply 21 type V150-4.5 wind turbines and has entered into a 20-year service agreement.

Contributes to green local development
During construction as well as in the operational phase, the three new wind farms will create local jobs and economic development, and they will also improve electricity supplies and be a supplement to hydro power, which is challenged by long periods of drought. The wind farms are expected to produce close to 420 GWh a year and reduce carbon emissions by more than 2.2 million tons over the 20-year lifetime of the project.

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