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Mubadala Capital earmarks USD 13.5 bn for biofuels in Brazil: Mubadala Capital — sovereign wealth fund Mubadala’s asset management arm — is looking to set up a USD 13.5 bn biofuels project in Brazil over the next 10 years to produce renewable diesel and sustainable aviation fuel, Mubadala Capital’s head of Brazil, Oscar Fahlgren, told the Financial Times. Mubadala Capital will fund the investment through a mix of equity and debt over a period of five to 10 years, according to Fahlgren.
The details: The biofuels plant — to be developed by Mubadala Capital’s energy subsidiary Acelen — will comprise five USD 2.7 bn modules, each including a biorefinery with the capacity to process 20k fuel barrels per day. The first module is set to commence production by the end of 2026. Additionally, Mubadala Capital plans to convert an existing oil refinery, acquired from Brazil’s state-owned energy firm Petrobras in 2021, in the northeast region of Brazil.
Why Brazil? “It’s all about feedstock [which] in reality is agriculture. And Brazil is probably the best-placed country on the planet when it comes to agricultural proficiency because of the climate and the fertile soil. Brazil is to agriculture what Abu Dhabi is to oil,” Fahlgren told the salmon-colored paper.
This isn’t the first time we hear about these projects: Mubadala Capital signed an MoU with Petrobras in 2023 to partner on the refinery project, which Petrobras is looking to repurchase from Mubadala. In April 2023, Acelen revealed the estimated cost for the biofuels project’s first module, saying it plans to invest USD 2.4 bn to produce 1 bn liters per year of hydrotreated vegetable oil.
Fahlgren confirmed that Mubadala Capital is planning to open a new stock exchange in Brazil, stating that “Brazil is a very large country,” and that it plans to roll out the exchange in a staged launch, starting with equities and later expanding to other asset classes.
ICYMI- Bloomberg reported in March that Mubadala Capital plans to establish a stock exchange in Brazil through its subsidiary, Americas Trading Group (ATG), to rival the Brazilian stock exchange, B3. Mubadala is looking to launch the new exchange in Sao Paulo by 2025, aiming to enhance competition, potentially reduce listing and trading costs for companies in Brazil.
Mubadala has a diverse portfolio in Brazil: Among Mubadala Capital’s various investments in Brazil — which include metro lines and the São Paulo Formula 1 Grand Prix promoter MC Brazil Motorspor t — the asset manager acquired Grupo Novonor’s 6.85% stake in Brazilian sugarcane processor Atvos, raising its total stake to 38.35%.
Mubadala Capital also raised its stake in Brazilian food retailer Zamp to 58% after investing some USD 200 mn in Zamp alongside Affinity Partners, the private equity firm founded by Donald Trump’s son-in-law Jared Kushner. This move “just happened and we have no other specific investments earmarked, but I wouldn’t rule it out,” Fahlgren said as he expressed that he was “very happy” about the partnership.
ICYMI- Affinity Partners joined Mubadala on Zamp’s board after Asad Naqvi was elected as board member, alongside two executives appointed by Mubadala last week.
Mubadala wants to expand its foothold in Brazil even further: “We’re very bullish on the investment climate in Brazil right now and the opportunities we see. We do have a number of assets that are relatively mature today, and could be potential exit candidates in the not too distant future,” Fahlgren said. The asset manager is reportedly mulling ownership in a new Brazilian football league.
