Mubadala Capital, the investment arm of the Abu Dhabi sovereign wealth fund, plans to invest heavily in biofuels in Brazil, the Financial Times reported, citing Mubadala’s head of Brazil operations.
Oscar Fahlgren says the $13.5 billion investment in biofuels is part of a broader investment plan for Brazil, which could also include establishing a new stock exchange in the country. told FT.
“It’s all about the ingredients [which] It’s actually agriculture. And Brazil is probably the best-positioned country on earth in terms of agricultural proficiency, thanks to its climate and fertile soil,” explained Fahlgren. “What Brazil is to agriculture is to oil. It’s the same as Abu Dhabi.”
The plan includes the construction of five processing units, each costing $2.7 billion and capable of producing 20,000 barrels of biofuel daily. The first of these units are expected to be operational by the end of 2026.
Mubadala’s head of Brazil operations said part of the total biofuel investment will be used to convert the refinery into a biofuel plant. A UAE company purchased a refinery in Bahia state in 2021.
“This is a very important capital project,” Fahlgren said. “We see great opportunities to invest in Brazil’s green energy transition sector.”
Brazil is the world’s largest producer of bioethanol, accounting for one-fifth of global production. However, the country’s biofuel industry has experienced several setbacks in recent years due to poor sugarcane crops, gasoline subsidies and financial problems.
Still, production remains strong, reaching 409,000 barrels of oil equivalent per day in 2022, up from 391,000 barrels of oil equivalent in the same period last year.
Mubadala has had a presence in Brazil for over 10 years across a variety of industries. He’s not doing it alone either. The FT said two-thirds of Mubadala’s Brazilian capital came from outside investors.
Written by Irina Slav for Oilprice.com
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