Mubadala Capital, the investment arm of Abu Dhabi’s sovereign wealth fund, has announced a massive investment of $13.5 billion in a biofuels project in Brazil over the next decade. This is part of a broader investment plan that also includes the creation of a new stock exchange in the Latin American country. The project aims to produce renewable diesel and sustainable aviation kerosene using non-food plant matter, with the first production module set to begin by the end of 2026.
Oscar Fahlgren, head of Brazil strategy at the sovereign wealth fund, emphasized the importance of feedstock and highlighted Brazil’s expertise in agriculture due to its climate and fertile soil. The ambitious project will comprise five $2.7 billion modules, each containing a biorefinery with the capacity to process 20,000 barrels of fuel per day, along with infrastructure and planted areas for the input crop. The initiative also involves converting an existing oil refinery in Bahia, acquired in 2021 from Petrobras.
The investment of $13.5 billion will be funded through a combination of equity and debt over the next five to ten years. Mubadala Capital views Brazil as a prime opportunity for investment in green energy transition, given its extensive history of investments in the country. The asset management company sees significant potential in Brazil’s investment climate and is actively pursuing opportunities in various sectors, including infrastructure, education, and food franchises.
In addition to the biofuels project, Mubadala Capital plans to open a new stock exchange in Brazil through its Americas Trading Group. Fahlgren believes that Brazil’s current infrastructure, with only one stock exchange, is suboptimal for market players, and the new exchange will provide more opportunities for investors. The move to acquire struggling international food franchises in Brazil, such as Outback Steakhouse, further solidifies Mubadala Capital’s presence in Latin America and its commitment to expanding its portfolio in the region.
The investment arm of the Abu Dhabi sovereign wealth fund recently took control of Zamp, the operator of Burger King and Popeyes outlets in Brazil, with plans to consolidate various foreign food franchises under one umbrella. This strategic move demonstrates Mubadala Capital’s long-term vision for growth and diversification in the Latin American market. With a focus on sustainability and renewable energy, the investment in the biofuels project aligns with global efforts to reduce carbon emissions and transition to cleaner sources of energy. Brazil’s agricultural expertise and favorable climate position it as a key player in the production of biofuels, making it an attractive destination for investment from Mubadala Capital and other international investors.
