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Brookfield seeks partner to produce biomethane in Brazil

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Brookfield decided to enter the biogas and biomethane market in Brazil in 2024. The Toronto-based asset manager is in advanced negotiations to buy a stake in a project with investments that could reach $300 million (nearly R$1.5 billion).Brookfield did not disclose the name of the possible partner but said the target company hired a bank to explore proposals from investors. The two companies are currently in the negotiation stage, according to Brookfield. André Flores, director of renewable energy and transition at Brookfield, says the plants under negotiation should convert biogas into biomethane, which has a higher value added."We see landfills at a more mature stage, with large projects in operation. In a second stage, it would be something linked to the sugarcane industry," said Mr. Flores. According to him, the idea is to close the deal with a capital-intensive industry with accelerated growth that is open to entering a partnership. "[Our current talks] are with partners to build a series of projects over the next two or three years."Biomethane, also known as renewable natural gas (RNG), is a purified version of biogas, a mix of gases that originate from the natural breakdown of organic matter through the process of anaerobic digestion.Companies such as Orizon and Solvi, which have been operating in the sector for a long time, are also on Brookfield’s radar. The amount to be invested involves debt of between 50% and 60%. To make up the difference, the asset manager will tap funds earmarked for developing economies. "We are raising an energy transition fund to invest in Brazil and emerging markets," the executive added.Biogas operators are generally from other sectors, such as landfills, sugarcane production, or agriculture. Brookfield’s vice president of investments in renewable energy and transition, Rodrigo Solera, said the current discussions are revolving around the possible creation of a subsidiary or other type of business arrangement.The trend marks the entry of major players in the segment. Last week, oil giant Petrobras announced that the green hydrogen market is part of its strategy to return to producing fertilizers and said the company intends to use biomethane as a way to go green and diversify hydrogen production routes.Cosan’s gas company Compass announced in 2023 investments of R$355 million in a joint...

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