LONDON, UK: VH Global Sustainable Energy Opportunities announced the completion of the acquisition of the Mascarenhas Hydro Electric Facility in the state of Espírito Santo, Brazil.
The final amount paid on completion was BRL 708mn versus the BRL 800mn which was subject to adjustments as highlighted in the Company’s announcement of the signing of the purchase agreement on 31 August 2022. These are closing adjustments based on the latest balance sheet related to agreed cash and working capital levels.
The expected annualised returns support the Company’s target annual dividend and exceed its target total return.
The Hydro Facility has been acquired from EDP Energias do Brasil S.A., a listed company on the Sao Paulo Stock Exchange, one of Brazil’s largest electric utility companies and a subsidiary of leading European utility Electricidade de Portugal S.A. (EDP).
Mascarenhas has been in operation since 1974 and has a peak capacity of 198MW. Since being first commissioned, the Hydro Facility has been managed and maintained to a high standard and offers a strong and sustainable cashflow potential for GSEO with an estimated remaining useful life of 45 years. Over 60 per cent of the revenues are secured under long-term power purchase agreements (PPA) with local utilities which are adjusted with local inflation with no caps.
The energy regulator in Brazil ranks over 140 hydro plants across the country, based on a number of factors to assess their quality and operation. The Mascarenhas facility has been consistently ranked as a top 10 hydro plant in the country.
This acquisition adheres to the Company’s renewable power enablement strategy for Brazil, an OECD Key Partner country with the largest power market in Latin America and a population of over 213 million people. Brazil is the largest hydro power market in the world.