Brazil's Renova set fair for growth

After registering a first full year in income from wind operations in 2013 – and finalising a capital increase deal with state-controlled power group Cemig – independent renewables company Renova has enough cash to continue exploring new wind power and solar assets in 2014, investor relations manager Flávia Carvalho said.

Renova ended 2013 with R$132m ($55m) in cash. Cemig is due to carry out a capital injection of R$1.4bn that will be used to boost its indirect 8% stake in the company to up to 27.4% direct participation in total capital.

That will pay for the acquisition of the control of Brasil PCH, a small hydroelectric dam operator that Cemig and Renova bought together at the end of 2013.

The capital injection should occur in March, Carvalho said. “Now we have a cash flow to finance our growth,” she told a conference call to explain the company's results.

Renova sees opportunities in government auctions, in the non-regulated market and in small distributed solar energy. It is also preparing itself to invest in large-scale solar, said Carvalho.

In 2013, Renova saw the first full year operation of the 294MW Sertão Alto I wind power farm. This, together with revenue from small scale hydro plants, resulted in net operational revenues of R$226m, up from R$115m in 2012 when the wind projects were operational only for about half of the year.

The company reported an Ebitda in 2013 of R$158m and net profits of R$6.3m. This compares with an Ebitda of R$56m in 2012 and a loss of R$6m in 2012.

In 2014, Renova should see an increase in revenues, since the 386MW Sertão Alto II is scheduled to start operations in March, while Brasil PCH's 150MW in generation assets should also generate cash.

“The company's operational structure is now much more aligned with the cash-intensive business we are in,” Carvalho said.

By the end of 2014, Renova expects its operating wind installed capacity to reach 462MW up from 294MW at the start of the year. Its small hydro assets are expected to remain stable at 190MW.