Patria Investments agreed in December 2023 to buy four operating wind complexes in Brazil from ContourGlobal and Eletrobras. Seven months later the deal closed with a second buyer on the cap table and a new operator for the turbines. The price was never disclosed. The one figure that did surface, from Eletrobras, points to a valuation far below newer Brazilian wind farms, and the age of the contracts explains much of it.
Key takeaways
- Patria Investments signed an agreement on 7 December 2023 to acquire a 596.7 MW operating wind portfolio in Brazil from ContourGlobal and Eletrobras through its Infrastructure IV fund, with the deal value undisclosed.
- The Patria portfolio comprises the 205.1 MW Chapada I, 172.4 MW Chapada II, 59.2 MW Chapada III and 160 MW Asa Branca wind complexes, held through 20 special purpose entities.
- The four complexes sell power under 20-year contracts won in Brazilian government auctions in 2010 and 2013, at a weighted average tariff of $58.6 per MWh, with an average remaining contracted life of 12.36 years.
- Invenergy announced on 1 July 2024 that it had joined the acquisition with a 10 percent stake, leaving Patria with 90 percent, and will provide operation and maintenance services for the turbines.
- ContourGlobal announced completion of the sale of the 596.7 MW portfolio on 2 July 2024, after regulatory and creditor consents.
December 2023: what did Patria agree to buy?
A mature, fully contracted portfolio from two sellers with different stakes. ContourGlobal owned 51 percent of Chapada I and Chapada II and all of Asa Branca and Chapada III. Eletrobras owned the other 49 percent of Chapada I and II, which together form 13 special purpose entities and 377.5 MW in the state of Piaui. Patria agreed to buy 100 percent of all four assets.
A special purpose entity is a company set up to hold a single project, so that its debt, contracts and permits sit apart from the owner's other assets. This portfolio has 20 of them: 15 across the Chapada complexes and five for Asa Branca.
The assets are not new. Asa Branca started operating in 2013, Chapada I in 2015, and Chapada II and III in 2016. On a weighted basis the portfolio had been running for 7.64 years when the deal was signed.
Why did the contracts matter more than the turbines?
Because the contracts set the revenue and the clock. Each complex sells its power under a 20-year agreement won in a government auction, which Leap classes as a feed-in tariff: a fixed price per MWh for every unit delivered over the term. Asa Branca's contract came from the 2010 alternative energy auction, and the Chapada complexes' from the 2013 auction.
The weighted average tariff across the portfolio is $58.6 per MWh. For a buyer, the more important number is the 12.36 years of contracted life remaining on average. After that the projects must find new buyers for their power at whatever price the market then offers.
That is the trade a buyer of mature auction assets makes. The near-term income is fixed and visible. The value beyond the contract depends on turbine life and future power prices, both of which a buyer has to estimate rather than read off a contract.
What did Eletrobras' figure reveal about value?
An indication, not a confirmed price. Leap records that for Eletrobras the sale accounted for $45.47 million in the third quarter of 2023, and that its stake generated an equity income loss of $2 million in 2022. Eletrobras framed the sale as part of a plan to optimise capital allocation and simplify its structure.
If the $45.47 million reflects Eletrobras' consideration for its 49 percent of Chapada I and II, the implied value of those two complexes on a 100 percent basis is about $92.8 million, or about $0.25 million per MW across 377.5 MW. Leap does not state that the figure is the sale price, so this should be read as an indication rather than a confirmed valuation.
Enerdatics records 17 wind M&A transactions in Brazil across 2023 and 2024, of which five carry a disclosed value. The cleanest comparable is Statkraft's acquisition of EDP Renewables' 260 MW Jerusalem and Boqueirao wind farms in August 2023 at an enterprise value of $320.2 million, or $1.23 million per MW. Those farms began operating in February 2023 under 20-year contracts, so nearly all of their contracted life was still ahead of them. Itau Unibanco's purchase of 12.34 percent of ENGIE's 882 MW Assurua complex, still in construction, grosses up to about $1.85 million per MW. Against those, the indication from Eletrobras' figure sits at roughly a fifth of the newest operating print. Twelve years of remaining contract against nearly twenty, and assets up to a decade old, account for much of that gap.
July 2024: what changed between signing and close?
The ownership and the operator. On 1 July 2024 Invenergy announced that it had acquired the portfolio alongside Patria, taking 10 percent while Patria kept 90 percent. Invenergy also took on operation and maintenance of the wind turbines, which Leap describes as a significant milestone for Invenergy Services in Brazil.
A day later ContourGlobal announced that the transaction was complete. Completion had been contingent on standard approvals, including regulatory and creditor consents. Creditor consent is the step at which lenders to the project companies agree to a change of owner.
Bringing in an operator as a minority partner aligns incentives. On older turbines, availability is what protects revenue under a fixed tariff, and an O&M provider with equity at stake shares in the downside if the machines underperform.
What does the deal signal for Brazilian wind?
It signals that the first generation of Brazilian auction-contracted wind farms is changing hands from developers and utilities to infrastructure funds. ContourGlobal and Eletrobras both exited fully. Patria, a fund, now holds the assets with an operator alongside.
It also shows how Brazilian wind is being priced by contract life rather than by megawatt. A 2023 farm with nearly twenty years of contracted income and an older farm with around 12 years left are both operating wind, but they are not the same asset. Buyers looking at the large corporate deals of the period, such as Equinor's $350 million Rio Energy deal or Statkraft's $1.95 billion acquisition of Enerfin, are buying pipelines and platforms. Patria bought cash flow with a known end date.
Frequently asked questions
What did Patria Investments buy in Brazil?Patria bought 100 percent of a 596.7 MW operating wind portfolio from ContourGlobal and Eletrobras: the Chapada I, II and III and Asa Branca complexes. Invenergy later joined with a 10 percent stake.
How much did Patria pay for the ContourGlobal wind portfolio?The deal value was not disclosed. Leap records that the sale accounted for $45.47 million for Eletrobras in Q3 2023 in respect of its 49 percent stake in Chapada I and II.
When did the Patria acquisition complete?ContourGlobal announced completion on 2 July 2024, a day after Invenergy announced it had joined the deal with a 10 percent stake and an O&M role.
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