Vale advances in selling renewable assets in Brazil to Global Infrastructure Partners (GIP)

With this move, Vale aims to enhance the profitability of its energy portfolio by partnering with a strategic player that can drive the growth and operational efficiency of Aliança Energia.

Brazilian mining giant Vale is in advanced negotiations to sell a majority stake in its renewable energy unit Aliança Energia and a solar plant to U.S.-based investment firm Global Infrastructure Partners (GIP), according to sources familiar with the deal.

The agreement involves the sale of 70% of both assets and has attracted interest from other industry players such as Casa dos Ventos and China Three Gorges (CTG) Brasil. However, these companies are no longer in the running, leaving GIP as the sole negotiator in the final stage of the transaction.

Exclusive Negotiations with GIP

Sources indicate that Vale has chosen to continue negotiations exclusively with GIP, although a final contract has yet to be signed. The mining company confirmed in a statement that it is still evaluating potential partners for Alianca but has not yet reached a final decision or signed a binding agreement.

For its part, GIP has declined to comment on the operation.

Estimated Deal Value

According to one source, the U.S. fund could pay between 5 billion and 6 billion reais (approximately $870 million to $1.04 billion) for 70% of Aliança and the solar plant. Aliança Energia operates a diversified portfolio of hydroelectric power plants and wind farms with a total installed capacity of nearly 1,300 megawatts.

Vale’s Renewable Energy Strategy

Vale became the sole owner of Aliança Energia in 2023 after acquiring the remaining 45% stake from energy company Cemig for 2.7 billion reais (about $470 million). The Brazilian miner launched the joint venture with Cemig in 2013 and has since strengthened its commitment to renewable energy as part of its sustainability and carbon reduction strategy.

With this move, Vale aims to enhance the profitability of its energy portfolio by partnering with a strategic player that can drive the growth and operational efficiency of Aliança Energia.

If the transaction is completed, it would represent a crucial step in Vale’s strategy to optimize its energy business, aligning with its commitment to transitioning to cleaner energy sources. For GIP, the acquisition would signify an important expansion in Brazil’s energy sector, consolidating its presence in one of the emerging markets with the greatest growth potential in renewable energy.