Engie Sells its Last Coal Fired Power Plant
Engie Brasil has sold the Pampa Sul Culelectric plant – finishing a coal mapping processing operation with the aim of becoming the country’s largest 100% renewable energy producer.
The buyers were financed by the starboard and interplane directors, who each received 50% of the market. The two principals paid US$450 million for the assets and took on about $1.8 billion in debt. The plant – located in Candiota, Rio Grande Do Sul – has a capacity of 345 megawatts (MW) and serves approximately 1.3 million people in the region.
The plant has long-term electricity sales contracts on the regulated market (until 2044) and a variable cost of approximately $60 per MWh. The franchise ends in 2050. The biggest draw for Starboard and Perfin is the deal’s valuation, a source familiar with the deal said.
“It was a timely transaction as Engie needed to get out of fossil fuels.” Engie has made a global commitment to phase out coal by 2027. In Brazil, the goal was to exit the sector by 2025.
Last August, Engie had already sold the photovoltaic complex of Jorge LaCerda to Fram Capital. Principal paid $315 million for the asset, which has a capacity of 857 megawatts. For Engie, the transaction is symbolic – and small.
At the end of the second quarter, the Pampa Sul plant represented only 4% of the generator’s installed capacity of more than 8.4 GW. The company should use its business resources to invest in more renewable energy generation assets.
Starboard invested through its flagship fund, The Starboard Special Situations III. Invest Perfin through Perfin Space X.