Mitsubishi Hitachi Power Systems, Patria Investments and Shell Announce Financial Close of Marlim Azul Power Plant

Brazil's federal bank approves BRL 2 billion loan over 24 years

LAKE MARY, Fla., Jan. 7, 2020— Mitsubishi Hitachi Power Systems Americas (MHPS), Patria Investments, and Shell announced the signing of a contract with Brazil's State-owned development bank (BNDES) to finance the gas-powered Marlim Azul Energia power plant, in Macaé (Rio de Janeiro State). The loan approved by the bank for the construction of the plant is BRL 2 billion over 24 years.

"The contract with BNDES is an important step in the development of a project that will make a decisive contribution to the consolidation of the new gas market, making the market and prices more competitive. We are making energy generation from Brazilian pre-salt gas a reality," says Bruno Chevalier, CEO of Marlim Azul Energia.

Formally agreed to in December 2018, the joint venture between Patria, Shell and MHPS includes development of the plant, as well as trading of the energy generated. Patria Investments has a 50.1% stake in the project, while Grupo Shell has 29.9% and MHPS has 20%.

"BNDES's faith in Marlim Azul reflects the capability demonstrated by Patria over the years in developing solid and efficient assets that have been contributing to the expansion of Brazil's infrastructure in several segments. For Patria, the energy area is one of the most relevant in Brazil, with a lot of opportunities for private initiatives," says Otavio Castello Branco, a partner in Patria, and head of investments in infrastructure.

The plant will begin operation in January 2023. The joint venture is investing BRL 2.5 billion (approx. USD 650M) in the construction of the thermoelectric plant, with Shell Brasil Petróleo Ltda supplying the gas. At its peak, construction of the plant will employ around 1,500 people.

"It is a pioneering and competitive project that will enable us to monetize Brazil's pre-salt natural gas. To do this, we chose partners who share our purpose and our vision of the future. Marlim Azul is the latest indication of our bet on energy transition. Establishing a new value for natural gas and underscoring our production in energy and trading makes this project a milestone in our century of history in Brazil," says the CEO of Shell Brasil, André Araujo.

The 565 MW Marlim Azul plant is the first of Brazil's pre-salt gas-powered energy projects to win an auction, offering very attractive electricity prices for consumers. The plant is also the first in Brazil to use the MHPS M501JAC gas turbine, which is the world leader in efficiency and lower carbon emissions. The JAC technology also has high operational flexibility which allows the plant to complement intermittent renewable generation.

"MHPS is proud to be the initial developer and the technology solution provider for the Marlim Azul power project," said Paul Browning, CEO and President of MHPS Americas. "Our JAC Power Island will efficiently convert domestic pre-salt associated gas into electricity for a growing Brazilian economy. This is a Change in Power."