I Squared Capital has agreed to put $400 million into Origo Energia for a 49 percent stake. Origo is Brazil's largest distributed solar business, with around 100,000 subscription customers and 300 MW already running. Measured against that operating fleet, the price looks steep. Measured against what Origo plans to build, it looks cheap. Which of those readings holds depends on where the money goes.
Key takeaways
- I Squared Capital announced on 8 January 2024 that it agreed to acquire a 49 percent stake in Origo Energia, a Brazilian distributed solar generation company, for $400 million, its first direct investment in Brazil since opening a São Paulo office.
- Origo Energia operates about 300 MW of distributed solar across 100 solar farms and holds a pipeline of more than 2 GW across 20 Brazilian states; Leap records the transaction at 2,300 MW.
- Leap's record states that the I Squared investment will fund construction of more than 2 GW of solar projects in Brazil, with estimated capital expenditure of $1.2 billion.
- On a simple gross-up, I Squared's $400 million for 49 percent of Origo implies a value of about $816 million for the whole company, or about $0.35 million per MW across the 2,300 MW Leap records.
- Enerdatics records 22 Brazilian solar transactions announced in 2023 and 2024; the seven priced asset deals among them have a median of $1.06 million per MW.
What is I Squared actually buying into?
It is buying into a subscription model rather than a portfolio of contracts with a few large buyers. Origo sells solar power to homes and small businesses at a discount, with no upfront installation cost to the customer. Distributed generation, in Brazil's usage, means smaller solar plants whose output is credited against the bills of consumers connected to the same distribution network, rather than utility-scale farms selling into the wholesale market.
That model explains the customer count. Origo has been operating since 2010 and serves more than 100,000 customers, which makes it the largest distributed generation business in the country by Leap's account. For larger consumers such as factories and supermarkets, it signs customised power purchase agreements instead.
So the revenue base is wide and granular. That is a different risk from a utility-scale project with one offtaker. Credit exposure is spread across many small accounts, and the commercial work is continuous rather than front-loaded at financing.
I Squared does not arrive alone. Origo's other key shareholders include Augment Infrastructure, TPG ART with Circularis Partners, BlaO (Blue like an Orange Sustainable Capital), MOV Investimentos and Mitsui. I Squared joins that register with just under half of the company.
Why does the price per MW change so much depending on the denominator?
Because almost all of the capacity in the deal does not exist yet. The operating fleet is about 300 MW. The pipeline is more than 2 GW. Divide the implied company value by one or the other and the answers sit an order of magnitude apart.
Against the 2,300 MW Leap records, the implied $816 million works out at about $0.35 million per MW. Against the 300 MW in operation, it is roughly $2.72 million per MW, far above anything a Brazilian solar asset trades at. Neither figure is the right one on its own. The first treats unbuilt projects as if they were finished. The second treats them as worthless.
A minority stake adds a second trap. Dividing $400 million by the full 2,300 MW gives $0.17 million per MW, which is the figure Leap's structured per MW field shows. That compares a 49 percent consideration with 100 percent of the capacity, and understates the price by roughly half. Grossing up to 100 percent first is what produces the $0.35 million figure.
Where does the $400 million go?
Into construction, according to Leap's record. Leap lists Origo Energia itself as the counterparty, and states that the investment will fund the build-out of more than 2 GW of solar across 20 states, at an estimated capital expenditure of $1.2 billion.
That changes how the deal reads. If the money funds new plants, it is growth capital for the company rather than a cheque to exiting shareholders. I Squared's $400 million would cover about a third of the stated build budget. The rest would have to come from debt, from operating cash flow, or from further equity.
It also explains why a buyer would pay a valuation that looks high against 300 MW. The stated capex implies no more than about $0.6 million per MW to build the pipeline, if "more than 2 GW" is taken as 2 GW. An investor paying around $0.35 million per MW of total capacity for a business that can build at that cost is paying for the development platform, the customer book and the right to deploy capital, not for the steel already in the ground.
Enerdatics' data shows how far that sits from asset pricing in the same market. Enerdatics records 22 Brazilian solar transactions announced in 2023 and 2024, of which only seven asset deals carry a disclosed value that converts to a price per MW. Their median is $1.06 million per MW, with an interquartile range of $0.86 million to $1.17 million. The closest distributed generation prints are a 115.4 MW portfolio at $132.9 million, or $1.15 million per MW, in April 2024, and a 44.3 MW portfolio at $37.71 million, or $0.85 million per MW, in November 2024. Five further deals in the slice are corporate transactions worth a combined $2.11 billion, and those cannot be read per MW at all.
What does the deal signal for Brazil's distributed solar market?
It signals that large infrastructure investors now treat distributed generation in Brazil as a platform business worth backing at scale. Leap describes this as I Squared's first direct investment in Brazil since it established its São Paulo office. A first deal in a new office is usually chosen to carry a thesis, and the thesis here is the subscription model rather than any single asset.
It also fits a pattern visible across Brazilian renewables, where buyers have been paying for platforms rather than for individual projects. Patria's purchase of four operating wind complexes in Brazil and Equinor's acquisition of Rio Energy both show how much of a Brazilian valuation sits in what is still to be built, or in how the deal is structured, rather than in megawatts already running.
For anyone benchmarking Brazilian solar, the lesson is to separate the two kinds of print. Asset deals cluster around $1 million per MW. Growth equity into a developer with a large pipeline will look far cheaper per MW and far dearer per operating MW, and neither number belongs in the same table as the asset deals. The transaction was expected to close in the first quarter of 2024.
Frequently asked questions
How much did I Squared Capital pay for its stake in Origo Energia? $400 million for a 49 percent stake, announced on 8 January 2024. On a simple gross-up that implies a value of about $816 million for 100 percent of the company.
How much solar capacity does Origo Energia have? About 300 MW of operating distributed generation across 100 solar farms, plus a pipeline of more than 2 GW across 20 Brazilian states. Leap records the transaction at 2,300 MW.
What will the I Squared investment be used for? According to Leap's record, it will fund construction of more than 2 GW of solar projects in Brazil, with an estimated capital expenditure of $1.2 billion.
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