Mubadala to invest $13.5bn in sustainable biofuels in Brazil

Paulo Fridman/Alamy via Reuters Connect

• Investment via Acelen subsidiary
• Five ‘modules’ costing $2.7bn
• 100,000 barrels of fuel per day

Mubadala Capital is to invest $13.5 billion in biofuels in Brazil. 

Its chief investment officer and head of Brazil Oscar Fahlgren told the Financial Times that the scheme to produce renewable diesel and aviation kerosene using mainly non-food plant matter is “a very important capital project”. 

Mubadala is the second-biggest sovereign wealth fund in Abu Dhabi after Abu Dhabi Investment Authority. Its energy company, Acelen, expects to begin production of sustainable fuel by the end of 2026.

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The development will consist of five biorefinery “modules”, each capable of producing 20,000 barrels of fuel a day and costing $2.7 billion. The crops required to make the fuel will be grown within the modules. 

Fahlgren told the Financial Times that he saw a “tremendous opportunity” to invest in Brazil’s green energy transition. “Brazil is to agriculture what Abu Dhabi is to oil,” he said.

Mubadala also plans to convert an existing oil refinery in Bahia in the north-east of Brazil, which it acquired from the state-controlled company Petrobras in 2021. 

The projected total $13.5 billion cost of the biofuels venture will be covered by a mix of equity and debt over a period of five to 10 years, Fahlgren said.