ArcelorMittal announces that its Brazilian entity, ArcelorMittal Brazil, will form a joint venture partnership with Casa dos Ventos, one of Brazil’s largest developers and producers of renewable energy projects, to develop a 554 MW wind power project.
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ArcelorMittal Brazil will hold a 55 per cent stake in the JV, with Casa dos Ventos holding the remaining 45 per cent.
The transaction was approved by the Brazilian antitrust authority, CADE, on 13 April and will be completed within the next 15 days.
The c. $0.8 billion project aims to secure and decarbonise a considerable proportion of ArcelorMittal Brazil’s future electricity needs. It is estimated it will provide 38 per cent of ArcelorMittal’s Brazil’s total electricity needs in 2030.
The JV will be equity accounted and ArcelorMittal’s total equity investment will be c. $0.15 billion.
The Babilonia project will be located in the central region of Bahia, north-east Brazil.
The site location has been selected due to several competitive advantages, including high-capacity forecast load factors (in excess of 50 per cent) and a short distance (23 km) to connect to the national electricity grid.
There is also the potential to expand the capacity of the project by adding a further 100 MW of solar power.
The project is currently at an environmental and regulatory permitting stage, with construction work anticipated to start later this year and operational commissioning in 2025.
ArcelorMittal Brazil will enter a 20-year power purchase agreement with the JV for the supply of electricity.
The Babilonia project is the third strategic renewable energy partnership ArcelorMittal has established in the past year.
In March 2022, the Company announced a partnership with the Greenko group in India to develop a ‘round the clock’ energy project with 975MW of solar and wind capacity.
The project will feed ArcelorMittal’s Indian steelmaking joint venture, AM/NS India, supplying over 20 per cent of its electricity requirements and reducing its annual carbon emissions by approximately 1.5 million tonnes a year.
In Argentina, ArcelorMittal has developed a partnership with PCR for a 130MW solar and wind capacity project that supplies over 30 per cent of ArcelorMittal’s local electricity requirements. ■