Mubadala Capital, the asset management arm of Abu Dhabi’s sovereign wealth fund, is set to embark on a substantial investment venture in Brazil, aiming to allocate approximately $13.5 billion towards a significant biofuels project over the next decade. This initiative forms part of Mubadala Capital’s broader strategy for Brazil, which also encompasses the establishment of a new stock exchange.
The project, led by Mubadala Capital’s energy company Acelen, will involve the production of renewable diesel and sustainable aviation kerosene primarily sourced from non-food plant matter. The development will consist of five modules, each with a budget of $2.7 billion, featuring biorefineries capable of processing 20,000 barrels of fuel per day. The first module is slated to commence production by the end of 2026, with subsequent modules to follow.
Oscar Fahlgren, head of Mubadala Capital in Brazil, emphasized the country’s agricultural proficiency, highlighting Brazil’s conducive climate and fertile soil for agricultural activities. Fahlgren described Brazil as “to agriculture what Abu Dhabi is to oil,” underscoring the nation’s strategic importance in the realm of bioenergy production.
Furthermore, Mubadala Capital’s investment in Brazil extends beyond the biofuels project, with approximately $6 billion already allocated to various ventures in the country, representing a significant portion of its global portfolio. The investment approach in Brazil is characterized by a focus on businesses facing complexity or distress, demonstrating Mubadala’s commitment to navigating challenging economic and political environments.
Additionally, Mubadala Capital’s endeavors in Brazil extend to the financial sector, with plans to establish a new stock exchange to complement the existing infrastructure. Fahlgren expressed the belief that Brazil’s current single-stock exchange setup is suboptimal, hinting at a potential expansion into other asset classes beyond equities in the future.
Among Mubadala Capital’s diverse portfolio in Brazil is its majority stake in Zamp, a company that franchises Burger King restaurants, as well as involvement in discussions for a proposed new football league aimed at commercializing the sport’s rights.
Fahlgren conveyed optimism regarding the investment climate in Brazil, citing mature assets within the portfolio that could present exit opportunities in the foreseeable future. Despite past economic and political challenges, Mubadala Capital remains steadfast in its commitment to Brazil, adopting a contrarian approach that has positioned the firm as an active investor in the region for over a decade.