Who is the company in Brazil’s Bahia state that will receive a US$2.44 billion investment from Abu Dhabi’s Mubadala

By Sergio Ripardo

Mubadala Capital, the investment arm of Abu Dhabi’s sovereign wealth fund, said it would invest R$12 billion (US$2.44 billion) within ten years to build a green diesel and aviation kerosene plant for Acelen in northern Bahia state.

The energy company, which owns the Mataripe Refinery (ex-Rlam, Landulpho Alves Refinery), was sold by Petrobras in 2021 for about R$10 billion (US$2.03 billion).

The investment is announced when large global funds, from private equity to venture capital, seek funds from Middle Eastern countries.

The sovereign wealth fund, which has about US$300 billion in assets under management worldwide, expects to start production in the first quarter of 2026.

The announcement of the investment plan comes at a time when the current Brazilian government says it will encourage clean energy production.

Mubalada’s Refinery in Bahia is the main supplier of oil derivatives in the Northeast, accounting for about 12% of the refining capacity in Brazil.

The sovereign wealth fund also has assets in the country, such as Prumo Logística (ex-LLX, of Eike Batista), the Southeast Port in Itaguaí (RJ), and the road concession Rota das Bandeiras, in the region of Campinas, in the countryside of the state of São Paulo.

In 2022, it even offered to control Burger King in Brazil.

The memorandum of understanding was one of several signed during the visit of President Luiz Inácio Lula da Silva to Abu Dhabi after starting his tour of Asia with three days in China.

The Emirates President, Sheikh Mohammed bin Zayed Al Nahyan received the Brazilian.

“I return to the country 20 years later to strengthen the relationship between Brazil and the UAE,” Lula tweeted on Saturday (15).

“The Emirates are the country in the region that invests the most in Brazil, will host the COP-28 this year and will expand investments in biofuels and renewable energy.”

The governor of Bahia, Jerônimo Rodrigues (PT), present at the entourage, was the one who signed the memorandum of understanding between the Northeastern state and Mubadala Capital.

In a statement, Acelen, controlled by Mubadala, detailed the investment plan for producing renewable fuels.

The expectation is to produce 1 billion liters per year, move R$ 85 billion in the economy, contribute to the generation of 90 thousand direct and indirect jobs, and reduce CO2 emissions by up to 80% by substituting fossil fuel.

The company informed that it intends to become one of the world leaders in the segment based on high-energy crops, from planting seeds to producing renewable fuels.

According to the company, the main bet will be on renewable diesel and sustainable aviation kerosene, produced through the hydrotreatment of vegetable oils and animal fat.

“Acelen’s energy transition path started at the beginning of its operations, with the modernization of the Mataripe Refinery and the reduction of its environmental impact.”

“We are taking a strategic step in our mission of protagonism in the energy transition,” said Acelen’s CEO, Luiz de Mendonça.

HOW WILL PRODUCTION BE?

In the first phase of the project, soy oil and complementary raw materials will be used, which have the highest available volume and competitiveness in the country, according to Acelen.

In the second stage, it will be used macaúba oil, a native Brazilian tree with high energetic potential not yet explored commercially, and dendê oil, with planting forecast to start in 2025.

The project foresees planting on 200,000 hectares, prioritizing degraded lands.

“The project was structured to have total synergy with the Mataripe Refinery, taking advantage of the existing infrastructure for utilities, tanking, and logistics.

A sustainable hydrogen generation unit will be built for the hydrotreatment of fuels. The forecast is to start construction in January 2024,” Acelen predicts.

The production capacity will be 20,000 barrels/day, about 1 billion liters per year, enough to supply 1.1 million vehicles annually.

The production of green diesel and sustainable aviation fuel will be done, at first, focusing on the external market in countries where these products are already approved for commercialization and consumption.

APPROXIMATION WITH ARABS

The approximation between the PT government and the Arab fund occurs at a moment of questioning from the political wing of Lula’s government about the privatizations carried out during predecessor Jair Bolsonaro’s government in the oil and gas sector, such as Rlam at the end of 2021.

The Lula government has already ruled out further privatizations of state-owned companies, unlike Bolsonaro, who has even signaled he favors selling control of Petrobras.

Since assuming the presidency, Lula has signaled that his policy will prioritize increasing the state’s economic presence.

With information from Bloomberg