RIYADH: UAE’s state-owned investment firm Mubadala Capital inked a deal to invest $2.5 billion in Brazil over the next 10 years to build a sustainable aviation fuel and kerosene plant in the northeastern state of Bahia.
The company announced on Saturday that the investment would be made through Acelen, Mubadala’s arm in Brazil, to start production in 2026.
Work on the new project is set to start in January 2024. It will produce 1 billion liters of hydrotreated vegetable oil per year, a diesel-like fuel made without fossil resources.
The project aims to reinforce Brazil’s role as a strategic provider of renewable fuels by capitalizing on its natural resources as the country already has a unit that produces soy-based biodiesel which was acquired by Mubadala in 2021.
Acelen anticipates that all of its renewable fuel production will be exported as there is still no regulation in the Brazilian market that makes domestic sales possible.
The agreement came within a framework of signings between Brazil’s President Luiz da Silva and UAE’s President Mohammed bin Zayed during their meeting in Abu Dhabi.
The two countries have been keen to facilitate trade, investment, and tourism exchange as growth and relations strengthen between the two governments.
UAE’s Minister of Economy Abdullah Al-Marri said that the Emirati-Brazilian partnerships are based on solid foundations of friendship and respect with mutual interests. “The total non-oil foreign trade for the year 2022 between the UAE and Brazil crossed the $4 billion mark, a growth of 32 percent from more than $3 billion in 2021,” he stated.
He added that despite the significant investments and cooperation between the two countries there are still vast untapped opportunities in the sustainability space.
The UAE is due to host the COP28 UN climate talks later this year, and Brazil is a candidate to host the 2025 edition.
The countries said they had agreed to work together to “encourage ambitious climate action” from the rest of the world.