EDP sets aside R$10bn for investments in Brazil by 2025

Portuguese group EDP has set aside R$10 billion for investments in its Brazilian subsidiary by 2025, according to the company's most ambitious strategic plan ever.

Starting this year, the power company will gear up investments in electricity distribution and transmission as it seeks growth opportunities in solar generation and resumes the plan to "recycle" capital through asset sales.

CEO Miguel Stilwell d'Andrade told Valor Brazil will continue to be among the group's main platforms in the coming years, even though the global investment plan gives greater weight to European and North American markets.

"We have been in Brazil for more than 20 years, experienced several cycles. The country offers good opportunities," the executive, who took over the company two months ago, says.

After a management shuffle, the Portuguese group decided to speed up the transition to a 100% renewable generation portfolio, committing to achieve carbon neutrality by 2030 as the company still operates gas and coal-fired thermal plants in Brazil and abroad. EDP will increase annual investments to ?4.8 billion from ?2.9 billion to get there, totaling ?24 billion by 2025, of which 80% will be directed to renewable projects.

In the Brazilian market, solar generation is the major bet regarding renewable energy. The plan is to increase more than 20 times the current portfolio of photovoltaic plants, jumping from 50 megawatts-peak (MWp) to 1 GWp in five years. Growth will come from both utility scale and photovoltaic distributed generation systems.

The company has been very active mainly on the solar distributed generation. Since December, it announced two deals in this field. The first was the acquisition of 40% of Blue Sol, a company that serves households and small businesses through very small and small solar photovoltaic generation systems, for R$20 million. It also agreed with AES Brasil last month to buy AES Inova, a platform that owns 34 MWp worth of plants in three states, in a R$177 million deal.

Another highlight of the plan for the coming years is the network segment, which comprises power distribution and transmission. EDP Brasil has two distribution businesses, in São Paulo and Espírito Santo, and a 30% stake in Santa Catarina's state-owned Celesc. In this field, the plan is to double the volume of investments compared to the recent years, with a focus on reducing losses and on digitalization. The company says it is not actively looking at the acquisition...

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