Iberdrola Renovables, in a consortium with local energy company Neoenergia, is to supply Brazil with electricity from 9 wind farms over 20 years for €60 million ($77 million) a year.
The contract was awarded in a recent tender for renewable energy, organised by Brazil's Agencia Nacional de Energia Electrica (Aneel), which determined contracts for 50 wind farms (1,520 MW), five hydroelectric plants (101 MW) and a biomass facility (64 MW).
Iberdrola was picked to supply electricity from nine wind farms, with a total installed capacity of 258 MW, for a 20-year period starting in January 2013.
The wind giant’s success in Brazil's second renewable's tender – in which it was awarded the most megawatts among the chosen operators – may reflect its recent memorandum of understanding with Neoenergia, a Brazilian energy holding company, to jointly develop and operate onshore and offshore wind farms in Brazil.
As the top power distributor in northeast Brazil, Neoenergia can help Iberdrola expand in one of South America’s most promising wind markets.
Iberdrola, whose 11,400 MW of installed capacity includes the 49 MW Rio do Fogo wind farm in Brazil, may also form a 50-50 joint venture with Neoenergia to participate in Aneel’s future tenders.
Iberdrola has operated in Brazil since the 1990s and has targeted the country as a key country in its expansion into Latin America.
Through Neoenergia, Iberdrola is the leading electricity distributor in northeast Brazil, with over 44% of the regional market last year.
Iberdrola also holds stakes in Cosern (Rio Grande state), Celpe (Pernambuco state) and Coelba (Bahia state), which enabled the company to supply 28,300 GWh to nearly 8.8 million users in Brazil in 2009.