BRAZIL Law and Practice Contributed by: André Menescal Guedes, Raissa Freire de Almeida and Bruno Paiva, André Menescal Advogados
utilities and infrastructure groups have focused on portfolio optimisation and deleveraging, selling non- core assets to finance participation in regulated con- cessions or firm-capacity projects. Global investors, in turn, have concentrated on acquiring operational assets with predictable revenues rather than early- stage developments. ESG considerations have become more embedded in deal execution rather than treated as a separate compliance layer. Investors are demanding measur- able decarbonisation metrics, governance transpar- ency and credible social impact data. The introduction of corporate emission reduction targets aligned with Brazil’s Paris Agreement commitments has also influ- enced due diligence processes and valuation models. Regulatory stability remains a key differentiator. The recently announced LRCAP 2026 guidelines, which include biodiesel and other alternative fuels in capac- ity auctions, reflect a more pragmatic approach to the energy transition – balancing decarbonisation with reliability. In parallel, the federal government’s hydro- gen initiatives, including support from the federal inno- vation agency FINEP for the Northeast Hydrogen Call, signal a long-term industrial policy aimed at creating new export corridors through ports such as Pecém and Suape. 1.3 Access to the Energy and Infrastructure M&A Market Investors are accessing the Brazilian energy and infra- structure M&A market through a combination of direct acquisitions, structured partnerships and platform- based investments. Traditional asset purchases and equity stakes in operating companies remain domi- nant, but there is a growing preference for joint ven- tures and co-investment vehicles designed to mitigate regulatory and financing risks. Foreign investors often partner with local developers or infrastructure funds to navigate environmental licensing, tax structuring and complex concession frameworks. Private equity and infrastructure funds, both domes- tic and international, have become central players. Leading global funds with long-term mandates – par- ticularly those from North America, Europe and the Middle East – are targeting regulated assets such as
transmission lines, sanitation concessions and logis- tics corridors. Pension funds and sovereign wealth investors are also increasing exposure through infra- structure debentures and brownfield portfolios. On the corporate side, major energy utilities and industrial groups are engaging in M&A to reposition their portfolios. Brazilian conglomerates are divest- ing non-core assets to deleverage, while international players such as Iberdrola, Engie and Brookfield con- tinue expanding through selective acquisitions. New entrants in renewable fuels and hydrogen are accessing the market through early partnerships with port authorities and state development agencies, tak- ing advantage of public-private initiatives to develop export-oriented hydrogen and ammonia infrastruc- ture, particularly in the Northeast. 1.4 Energy and Infrastructure Projects Brazil’s current energy and infrastructure pipeline is increasingly diversified, combining renewable expan- sion with new forms of firm capacity and grid resil- ience. More than BRL500 billion in investments are projected through 2030, led by electricity transmis- sion, sanitation, logistics corridors and emerging low- carbon fuels. Renewables remain the backbone of generation growth, with over 25 GW of wind and solar capac- ity under development – mostly concentrated in the Northeast. However, persistent curtailment and trans- mission bottlenecks have prompted a shift in project design. Developers are prioritising hybrid configura- tions that integrate solar, wind and storage solutions to ensure firm supply and optimise dispatch. A key policy evolution concerns battery energy stor- age systems (BESS). Brazil is moving towards the creation of a dedicated regulatory framework and a specific auction for storage capacity. The forthcoming mechanism is expected to treat BESS as a system resource, connected to the grid rather than operat- ing “behind the meter”. This approach would allow BESS to participate in capacity and ancillary service markets, enhancing system flexibility and supporting renewable integration.
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