蜜豆视频

Earnings upside from a secular, long-duration capex trend

We have compiled a universe of 26 Latin American companies exposed to the broadening investment themes of decarbonization and energy transition. Decarb themes we are following in this region include growing demand for sanitation improvement, clean energy, grid modernization, biofuel trends and residential/commercial energy management.

Biofuel in Brazil: The success story will not stop here

With infrastructure and social challenges to ensure overall electrification on one hand and solid and long-lived renewable fuel regulations on the other, Brazil has been in the vanguard of the biofuel industry in recent decades. Supported by the agribusiness sector, biofuel represents 35% of the country鈥檚 total fuel demand, with the third biggest (behind only the US and Sweden) consumption per capita in the world, at 0.74 boe/person per year. We expect the recently approved Combust铆vel do Futuro law to support a new expansion phase for biofuel in the country, following an increase in the ethanol blending mandate for gasoline to 27-35% and a target for a biodiesel mix of 15% in 2025, gradually increasing to 20% in 2030.

Electricity generation and solar trends

Brazil's energy matrix is one of the most renewable in the world, with 85% coming from renewables. However, renewable intermittency brings an important topic to the table: how can the regulator balance thermal generation with reservoir levels and utilize Brazil's clean matrix? While the benefits of renewable sources are undeniable, we think their uncoordinated integration is creating significant operational challenges that must be addressed to safeguard the country's energy future.