Brazilian alternative energy developer CPFL Renováveis has raised around BRL900 million (US$404 million) through an initial public offering that it intends to invest in renewable energy projects.
The funds raised will be used to finance renewable energy projects, mainly solar, wind and biofuels, although it is not known in what proportions the money will be distributed to each sector.
Around 80% is expected to be used to fund existing projects, with the remaining 20% to be used for acquisitions. According to market analysts in Brazil, it is expected that the funds raised by the IPO will allow renewable energy developers to diversify from wind energy – CPFL Renovaveis is currently the biggest owner of wind farms in South America.
Brazil’s solar market is widely believed to have great potential, but has so far struggled to take off in the face of competition from other forms of generation such as hydro.
The IPO was successfully completed in spite of recent turmoil in the Brazilian economy that meant Renovaveis’s sale was the first IPO from a Brazilian company since April this year. CPFL Renováveis is a subsidiary of CFPL Energias, the largest utility company in Brazil not owned by the state.