Gerdau announced that it has signed a binding agreement, via its subsidiary Gerdau Next, with Newave Energia, in a joint venture (JV) to produce 2.5 gigawatts (GW) of energy from renewable sources, solar and wind based, in greenfield projects.
Gerdau will own 33.33 percent of the project and Newave the balance 66.67 percent, with Gerdau investing BRL 1.5 billion ($808 million) divided in two phases: BRL 500 million will be paid during 2023, while BRL 1.0 billion will be paid subsequently, provided that some targets are achieved.
According to Gerdau, Newave is set to accelerating energy transition in Brazil, promoting the power of choosing renewable and competitive energy without bureaucracy, adding that the company is an end-to-end player in the market, with operations spanning from generating clean energy to trading it.
The JV should expand the competitiveness of Gerdau in the cost of the steel business, while providing a clean energy supply, in line with the carbon emission reduction targets established by company.