BRAZIL Law and Practice Contributed by: André Menescal Guedes, Raissa Freire de Almeida and Bruno Paiva, André Menescal Advogados
At the same time, the 2026 Capacity Reserve Auction (LRCAP 2026) is set to reinforce investment in firm generation, including multi-fuel thermal plants capa- ble of co-firing natural gas, biodiesel and hydrogen blends. These assets are attracting infrastructure and private equity investors seeking predictable long-term revenues. In parallel, port-based industrial clusters such as Pecém and Suape are consolidating Brazil’s position in the green hydrogen and ammonia value chains, sup- ported by R&D initiatives such as FINEP’s Northeast Hydrogen Call. Together, these developments point to a more integrated and resilient infrastructure matrix – balancing renewables, storage, dispatchable capacity and logistics to sustain long-term energy security. 2. Establishing and Exiting Early- Stage Companies in the Energy and Infrastructure Industry 2.1 Establishing and Financing a New Company Early-stage ventures in Brazil’s energy and infrastruc- ture sectors remain less common than in mature markets but are gaining in importance, particularly in emerging technologies such as green hydrogen, biofuels, storage and digital infrastructure. The key considerations for establishing and financing these companies involve regulatory complexity, access to long-term capital, and the need for credible industrial or offtake partnerships. Start-ups and early developers must navigate a multi- layered regulatory environment encompassing envi- ronmental licensing, grid access and sectoral approv- als. Unlike mature infrastructure assets, early-stage projects typically depend on development capital, venture funding or strategic investors rather than tra- ditional bank finance. Equity funding rounds are often structured through convertible instruments or partner- ship agreements with industrial players seeking inno- vation exposure. Public funding mechanisms have become crucial to unlock this segment. FINEP’s Northeast Call, launched in 2025, exemplifies the government’s push to accel-
erate pre-commercial hydrogen technologies and port integration projects, among other energy transi- tion enterprises. Other agencies, such as BNDES, are expanding green innovation credit lines tied to decar- bonisation and digital efficiency. Given the capital intensity and long development horizons, early-stage ventures in Brazil often align with state development agencies, port authorities or larger energy groups. The prevailing trend is to anchor financing through industrial collaboration rather than purely financial speculation, fostering projects with tangible scalability and export potential. 2.2 Liquidity Events Liquidity events for early-stage energy and infrastruc- ture ventures in Brazil commonly take two forms: (i) equity exits, through the sale of development rights or controlling stakes to strategic investors; and (ii) contractual liquidity triggers embedded in financing instruments. Equity exits occur once projects reach key maturity milestones, such as environmental licensing, grid access or secured offtake, allowing founders to mone- tise value before full construction. These transactions often involve utilities, infrastructure funds or foreign industrial players seeking local platforms. On the financing side, venture and project-level instru- ments increasingly include early maturity or liquidity clauses tied to performance and regulatory risk. In renewables, curtailment exposure, delays in transmis- sion reinforcement or material regulatory changes can trigger early repayment obligations or step-in rights by lenders or strategic investors. Given these risks, founders and investors must ensure that financing documents clearly define material adverse change provisions, performance thresholds and cure periods. Aligning ESG and technical compli- ance with lenders’ covenants is now essential to avoid premature liquidity events. Overall, liquidity in Brazil’s energy start-up ecosys- tem remains more contractual and event-driven than market-based, reflecting a pragmatic adaptation to sectoral volatility and regulatory uncertainty.
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