Rio Bravo Investimentos, the Brazilian investment company, plans to double the size of its renewable energy fund to 600 million reais ($348 million) next month to meet growing interest in wind farms from pension funds.
More than 90 percent of the backing in a current fundraising round for the company’s Rio Bravo Fip de Energia I fund will come from national pension funds, Sergio Guimaraes de Mello Brandao, who helps manage the fund, said in an interview today at a conference in Sao Paulo.
Brazil’s government-organized auctions for electricity contracts give wind farms a steady source of revenue, making the projects less risky and more appealing to pension funds, Brandao said.
“The regulatory framework is safer here than in the EU,” Brandao said. Brazil’s long-term contracts “offer all the security that’s necessary.”
The fund will have stakes in wind farms with 570 megawatts of total capacity by March 2014, he said. It will also be backing small hydroelectric plants with 160 megawatts of capacity by the end of 2016, he said.
Annual returns for the fund, which raised 300 million reais in October, are expected to be about 11 percent, excluding inflation, he said.