The 2010s was a challenging decade for the Brazilian sugar cane industry. Cogeneration offered potential for the sector to generate energy from sugar cane bagasse. But many mills found it difficult to raise the capital required.
We were engaged by Vale do Parana (a sugar cane mill located in Sao Paulo State crushing approximately 2 million tonnes a year) as its exclusive financial advisor, steering the company towards a strategic joint venture with Albioma (a multinational French company focused on renewable energy production). The joint venture remains active today.
CZ Approach
We used our extensive in-house corporate finance expertise on M&A and cogeneration projects:
- Elaboration of the economic feasibility study (valuation) of the Project;
- Preparation of the transaction’s marketing materials (Information Memorandum);
- Screening and approaching potential investors;
- Strategic consulting and advising on potential structures to guide the company to the best possible transaction with the right counterparty;
- Coordination of Due Diligence and negotiation of Definitive Documents.
CZ Solution:
A joint venture between Albioma and Vale do Paraná invested in a biomass energy cogeneration plant that raised the installed capacity of the mill from 16MW to 48MW, allowing a potential export of 30MW of renewable energy to the grid.
The joint venture was later financed by the Brazilian national development bank (BNDES) for BRL100 million; the funds were used for expansion and modernisation, as well as for the construction of a transmission line.
Find below media coverage of the deal (Valor Economico):
https://www.novacana.com/noticias/francesa-albioma-lanca-terceiro-projeto-cogeracao-brasil-300516
Outlook
This was the 6th transaction where CZ’s Corporate Finance team acted as advisors in a successful Cogeneration M&A deal. We are the leader of this segment in Brazil.
Do you have a project we can help with? Talk to a member of the team to learn more
