I Squared Capital, a prominent global infrastructure investment manager, revealed today its commitment to invest a maximum of $400m in Órigo Energia, a frontrunner in distributed energy generation within Brazil.

The investment in Órigo aims to support the development of more than 2GW of distributed solar generation projects spanning 20 states throughout Brazil, with an anticipated capital expenditure of BRL6bn ($1.23bn).

This marks I Squared’s inaugural direct investment in Brazil following the recent inauguration of its São Paulo office. As a result of this investment, I Squared will secure a 49% ownership stake in Órigo Energia. The transaction is projected to conclude in the first quarter of 2024.

Órigo Energia stands as the foremost distributed generation enterprise in Brazil, boasting a clientele exceeding 100,000 customers and an operational portfolio of 300MWp in distributed generation assets. These assets are strategically located across various regions, including Minas Gerais, Pernambuco, Ceará, Mato Grosso do Sul, Distrito Federal, and São Paulo. Órigo’s distinctive business model provides residential consumers and small to medium-sized enterprises with convenient access to the sustainable advantages of solar-powered energy, all at a discounted rate compared to traditional utility services.

I Squared Capital managing partner and Chief Investment Officer Gautam Bhandari said: “This is a landmark transaction for I Squared.

“We have ambitious plans for renewables and are leveraging our extensive experience in this space to build a leading global renewables-focused platform consistent with I Squared’s overall approach to investing.”

Órigo Energia CEO Surya Mendonça said: “This investment will allow Órigo to accelerate the construction of solar farms, expanding its service to thousands of new customers and over 20 states in the coming years.

“It will also reinforce our technology and customer experience focus, in line with the purpose of making solar energy accessible to small and large businesses as well as retail customers, while generating savings and driving Brazil to a greener future.”

The distributed generation sector in Brazil is witnessing substantial growth, propelled by well-defined regulations encouraging investments in various regions and the potential to expedite the transition to more sustainable energy sources. Solar power, increasingly affordable, is emerging as a key energy source in a market that spans approximately 90 million consumers nationwide.