ArcelorMittal has announced a joint venture (JV) partnership with Brazilian renewable energy developer Casa dos Ventos to develop the 554MW Babilônia Centro wind project in Brazil.

A 55% stake in the JV will be held by the steel manufacturer’s Brazilian subsidiary ArcelorMittal Brazil while the remaining 45% will be owned by Casa dos Ventos.

The agreement, which represents an investment of nearly $800m has been approved by CADE, the Brazilian antitrust authority. It is expected to be finalised within the next 15 days.

ArcelorMittal said that the JV will be equity accounted and the company expects to invest a total equity of about $150m.

ArcelorMittal CEO Aditya Mittal said: “As we expand our presence and add value to our Brazilian franchise we are conscious of the responsibility we have to decarbonise our operations.

“By collaborating with a respected energy transition operator in Casa dos Ventos, we can take advantage of the favourable Brazilian climate for renewable energy generation and make faster progress towards our climate targets.

“As well as making climate sense, this project makes financial and operational sense. It reduces electricity costs and provides energy security to our Brazilian business and will deliver consistent, attractive long-term returns.”

To be located in the central region of Bahia in north-east Brazil, the Babilônia Centro wind complex is expected to supply 38% of ArcelorMittal Brazil’s total electricity requirements in 2030.

The onshore wind farm will feature 123 wind turbines and has a potential to expand its capacity by adding an additional 100MW of solar power.

Currently, the Babilônia Centro project is at an environmental and regulatory permitting phase.

Construction on the Brazilian onshore wind project is anticipated to commence later this year with operations scheduled to begin in 2025.

ArcelorMittal Brazil is expected to sign a 20-year power purchase agreement with the JV for the supply of clean energy from the Babilônia Centro project.

Casa dos Ventos executive director Lucas Araripe said: “The partnership, in addition to collaborating with the energy transition of an important sector such as the steel industry, was structured so that the consumer can manage and assume the leading role in his energy supply.

“This model makes sense for consumers with relevant decarbonisation targets and that the energy theme will become increasingly strategic.”