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Abu Dhabi-based Mubadala Capital plans to invest about $13.5 billion in a major biofuels project in Brazil over the next decade, as part of broader plans for the country that include the creation of a new stock exchange.
The Emirati sovereign wealth fund’s asset management arm is increasing its bets on Latin America’s largest economy, where its holdings range from subway lines and medical universities to a majority stake in the local owner of the Burger King brand – alongside Donald Trump’s son-in-law, Jared Kushner.
In an interview with the Financial Times, the Brazilian head of Mubadala Capital revealed for the first time the full budget of his flagship program to produce renewable diesel and “sustainable” aviation kerosene, made primarily from non-food botanicals.
Energy company Acelen’s large-scale development will include five “modules” worth $2.7 billion, with the first set to begin production by the end of 2026. Each will consist of a new biorefinery with capacity to process 20,000 barrels of fuel per day, associated infrastructure and planted areas for growing the input crop.
“It’s all about raw materials [which] in reality it is agriculture. And Brazil is probably the best agricultural country on the planet because of its climate and fertile soil,” said Oscar Fahlgren. “Brazil is to agriculture what Abu Dhabi is to oil.”
The initiative also includes the conversion of an existing oil refinery in the northeastern Brazilian state of Bahia, which was acquired by state-controlled Petrobras in 2021. An expected total of $13.5 billion is expected to be funded through a mix of equity and debt over a one-year period of five to 10 years, Fahlgren said.
“It’s a very important capital project,” he added. “I see a huge opportunity to invest in the green energy transition sector in Brazil.”
So far, the group had only announced the estimated costs for the first module of the development. Mubadala Capital’s bioenergy project will build on its $6 billion investment in the country, representing about a quarter of the group’s global portfolio.
Two thirds of the capital in Brazil comes from external investors, the rest from the parent company Mubadala. The focus there is on companies in complex or difficult situations.
The eponymous sovereign wealth fund first entered the South American country in 2012 with a $2 billion investment to back former tycoon Eike Batista, who was once one of the world’s richest people before his energy and resources empire collapsed the following year.
As a result, Mubadala became the main creditor of Batista’s holding group EBX and took over several of its assets, including shares in ports and mines.
Today his portfolio includes a company that organizes the Formula 1 Grand Prix of São Paulo. Fahlgren described Mubadala’s approach in the country as “contrarian” as it has persisted despite economic and political crises over the past decade.
“We have been investing very actively in Brazil for more than a decade, in an environment where most foreign investors shy away,” he said.
Mubadala Capital has fully invested its second Brazil-focused fund, which closed last year with $710 million in commitments, he added. Americas Trading Group, a financial asset trading platform it bought in 2023, hopes to open an exchange in Brazil next year to compete with the established B3 in São Paulo.
“Brazil is a very big country. There is only one exchange. And I think that is a suboptimal infrastructure for the players operating in this segment,” said Fahlgren. “It will probably be a gradual start – maybe start with equities and then expand.” No asset class is off the table.”
Another focus is Zamp, which franchises Burger King restaurants in Brazil. Mubadala Capital has steadily increased its stake to 58 percent and recently elected a majority of seats on the board, which now includes an executive from fellow shareholder Affinity Partners, the private equity firm led by Jared Kushner. Affinity’s investment was first reported by The New York Times.
Fahlgren said he was “very happy” with the partnership with Affinity. “It just happened and we don’t have any further specific investments planned, but I wouldn’t rule it out,” he added.
Mubadala Capital is also involved in discussions about a planned new soccer league in Brazil, with the aim of pooling and selling commercial rights.
“We are currently very optimistic about the investment climate in Brazil and the opportunities we see,” said Fahlgren. “We have a number of assets that are relatively mature today and could be potential exit candidates in the not too distant future,” he added.