GALP: SOLAR MUST DEMAND 500 THOUSAND TO 700 THOUSAND EUROS PER MW IN BRAZIL

(PetroleoHoje) Galp’s recently acquired solar energy projects in Brazil should require investments between €500,000 and €700,000 per MW, informed the company’s executive director, Andy Brown, at an investor conference on Monday. “But we expect to get 65%-70% financing as well, so the equity contribution is much smaller,” he said.

Located in Bahia and Rio Grande do Norte, the projects mark the company’s entry in the segment in Brazil, where it has been present for more than 20 years in E&P, with a capacity of 282 MW and 312 MW, respectively, with expected start of operations in 2025. By 2030, Galp aims to generate 12 GW of renewable energy.

The projects in Brazil and the Iberian Peninsula will be developed by the company and, when they are in operation, Galp should consider selling part of its stake. “We are talking about the 50% dilution of our portfolio at the level of 12 GW and we maintain this”, said the executive, noting that the moment of divestments is linked to “a discipline that we want to instill in renewable businesses on how we make sure we obtain and have the opportunity to realize double-digit equity returns on our investments in renewable energy”.

In addition to the acquired projects, Galp has its eye on new photovoltaic and wind energy opportunities in Brazil. “No deals have been closed yet, but we continue to see how we can expand from that position [the current portfolio of 594 MW in the country],” Brown said.

In the period from 2021 to 2025, Galp intends to invest between €800 million and €1 billion per year. The expansion of its activities will focus on the renewables, new energies and focus on energy transition. The Iberian Peninsula and Brazil are at the heart of this strategy.

Results

Galp recorded production of 128.2 thousand boe/day, the same level as in the previous period. Of these, 115.7 thousand boe/day correspond to the company’s share of assets in Brazil, which dropped 4% compared to the same period in 2020. In the third quarter, the company was affected by maintenance activities.

The company reported Ebitda of €607 million and a net loss of €334 million (this one reported according to IFRS accounting standards), compared to €571 million and profit of €71 million in the previous quarter.

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