Equinor has signed an agreement to acquire Rio Energy, a prominent onshore renewables company. The deal was formalised with Denham Capital, which will retain certain assets, while Equinor takes charge of the selected assets and the team.
Pål Eitrheim, Equinor’s executive vice president for Renewables, championed the acquisition as a strategic move, stating, “Through Rio Energy, Equinor will take a leading position in the rapidly growing Brazilian renewables industry. It accelerates production and cash flow, gives us a strong platform for growth, and adds capabilities and an attractive project pipeline.”
This deal aligns with Equinor’s broader strategy of escalating its onshore renewables business in specific markets through the acquisition of local companies with high-quality teams and promising project pipelines. Over recent years, Equinor has made strategic investments in various renewables companies including Wento in Poland, BeGreen in Denmark, Noriker Power in the UK, and East Point Energy in the US, aiming towards flexible power offerings in select markets.
Equinor operating world’s first wind farm for offshore oil and gas | OilNOW
Veronica Coelho, country manager for Equinor in Brazil, expressed the benefits of this new alliance, stating, “Having Rio Energy onboard will strengthen Equinor’s ability to further develop the portfolio and reinforce our position as a broad energy company in Brazil. By building an attractive renewables position in the country, together with a robust oil and gas portfolio, we are supporting Brazil’s ambitions towards a diverse energy mix.”
Post transaction and following the carve-out of certain assets by Denham Capital, Equinor will own a 100% stake in Rio Energy and maintain the current management team, alongside approximately 140 employees. The procured portfolio comprises the 0.2 GW Serra da Babilonia 1 producing onshore wind farm in the north-eastern state of Bahia, a 0.6 GW pre-construction solar PV portfolio, and a project pipeline of around 1.2 GW of onshore wind and solar projects.
Rio Energy will function as a fully-owned Equinor subsidiary, and the team and management will continue to nurture its current portfolio. The acquired project portfolio is projected to deliver at the high end of Equinor’s anticipated range of 4-8% real base project return for renewables projects, taking into account the acquisition price.
MODEC to supply fully electrified FPSO to Brazil for Equinor’s Campos basin cluster | OilNOW
Equinor’s wholly owned energy trading house, Danske Commodities (DC), will manage the produced power in the Brazilian power market. DC recently established a trading office in São Paulo to back Equinor’s operations in the country.
Olav Kolbeinstveit, Equinor’s senior vice president for onshore and markets within Renewables, highlighted the market potential, “Brazil is the largest power market in South America, with expected demand growth and fast expansion of the deregulated market. By building a power portfolio in Brazil managed by DC, we can enable value uplift in line with our market-driven power producer strategy.”
The successful completion of this transaction remains contingent on obtaining the relevant regulatory approvals.
