Ceiba Energy Wins PPA for 1.6GW Portocem Project in Brazil

(Ceiba Energy, 10.Jan.2022) — Houston-based power company Ceiba Energy, backed by Denham Capital, a global sustainable infrastructure, energy and resources focused investment firm, announced the successful bid of its Portocem project for a 15-year PPA to build, own and operate a new 1.6 GW power plant in Brazil.

Ceiba Energy’s Portocem project won 30% of the total demand offered by ANEEL and the Ministry of Energy in this first of its kind capacity auction, which took place on 21 December 2021. The Portocem LNG-to-Power Project will be installed in the Pecém Industrial and Port Complex, in the state of Ceará in northeast Brazil, will be comprised of four, gas-fired, simple cycle units with capacity of 1.6GW and its associated Floating Storage and Regasification Unit (FSRU).

The Portocem project will supply the much-needed capacity to back the existing reliance on intermittent energy coming from renewable sources, while the FSRU will open up possibilities to bring gas to the region supporting industrial growth and energy transition. Portocem is ideally located to connect to existing gas pipeline and possible new gas infrastructure development toward Brazil’s interior regions. Additionally, existing nearby electrical transmission infrastructure makes the location even more attractive for a project of this scale. 

Portocem’s capacity will be sold to the Brazilian market as a reserve contract, minimizing the risk of system wide blackouts in low hydrology years. Portocem’s very competitive capacity price will back up the further expansion of cheap, renewable energy in Brazil, further contributing to long-term reductions in the cost of electricity in Brazil.

As a key new infrastructure development for the region, the project also has strong support from Ceará’s state government, the Pecem Industrial and Port Complex, and Cegas, the local gas distribution company.

The project, with a total investment of BRL 4.2bn (approximately $750mn) will be financed from Denham Capital’s equity funds and debt to be raised from local sources such as regional and national development banks as well as capital markets, among others.

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“We are very pleased to announce the success of the Portocem project at auction, which when operational will supply 1.6 GW of reliable capacity to the national grid operator. Our entire Houston and Brazil based teams worked diligently for a few years to be in this privileged position with an asset of this scale and a capacity PPA of this quality in a market like Brazil. This asset complements and transforms our expanding portfolio of infrastructure projects in Brazil as we look to capitalize on the significant growth potential in the Latam region,” said Emilio Vicens, Chief Executive Officer of Ceiba Energy. “This fully integrated LNG-to-power Portocem project has the strong support of world-class industry players and local Brazilian institutions, that are striving to deliver a reliable and cost-competitive power capacity solution in Northeast Brazil.”

Saurabh Anand, Managing Director of Denham’s Sustainable Infrastructure Equity team, added:

“Brazil is a key market for Denham Capital where our investments help drive economic growth. Our significant investment in the Portocem project reaffirms our place at the forefront of financing the country’s energy sector and complements our investment in Rio Energy platform that currently owns 1.1GW of operating and under or near construction renewable energy projects. As Ceiba rapidly continues its ambitious growth in the LatAm region, we look forward to continuing our partnership to develop projects which fuel sustainable economic growth and advance the energy transition.”

Notes to Editors

BNP Paribas served as Ceiba Energy’s financial advisor throughout the auction process.

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