'Oil Tycoons', the Arab royal family will produce biofuels in Brazil and generate jobs with investments of R$68,3 billion

Mubadala Capital, from the Arab royal family known as the 'Oil Tycoons', is now seeking to invest billions of reais in the production of biofuels in Brazil.

Abu Dhabi-based Mubadala Capital has plans to allocate around US$ 13,5 billion (equivalent to approximately R$ 68,3 billion) in an ambitious biofuels project in Brazil over the next ten years. This investment by the 'Oil Tycoons' is part of a broader strategy in the country, which also includes initiative to establish a new stock exchange.

Mubadala Capital will focus on biofuels for aircraft

The information was disclosed, for the first time, in an interview with Financial Times, by the head of Mubadala Capital in Brazil. According to the announcement, the full budget of its main project to produce renewable diesel and aviation kerosene “sustainable” – Biofuels, mainly using non-food plant material, will be divided into modules that seek to align industrial plants with agricultural areas to supply raw materials for production.

The 'Oil Tycoons' project is bold and shows the Arab Royal Family's objective of invest in Brazilian agriculture.

Mubadala Capital's asset management division is stepping up its presence in Latin America's largest economy. Its investments span a diversity of sectors, including subway systems, higher education institutions in the health sector and a majority stake in the company that owns the Burger King brand in Brazil, in a partnership that includes Jared Kushner, Donald Trump's son-in-law.

The large-scale development of your energy company, accelerate, will comprise 5 modules worth US$2,7 billion, the first of which should begin production by the end of 2026. Each of these modules consists of a new biorefinery with capacity to process 20 thousand barrels of biofuels daily, infrastructure linked to areas planted to cultivate the raw material.

Mubadala Capital has already invested US$6 billion in biofuels in Brazil

According to the head of Mubadala Capital in Brazil, Oscar Fahlgren, it's all about raw material which, in reality, is agriculture. And Brazil is probably the best positioned country in the world when it comes to agricultural proficiency due to its climate and fertile soil.

The 'Oil Tycoons' plan to convert an existing oil refinery in Bahia, Brazil, purchased from Petrobras in 2021. The company will invest US$13,5 billion over 5 to 10 years, financed by a combination of equity and loans , according to Oscar.

This is an extremely important capital project, highlights the executive, emphasizing the great investment opportunity in the transition to green energy in Brazil, with biofuels. O Initial investment in biofuels was only a part of the total development cost announced by Mudabala Capital.

The 'Oil Tycoons' focus on biofuels builds on US$6 billion already invested in the country, which represents around a quarter of their global portfolio. Two-thirds of the company's capital in Brazil comes from external investors, with the remainder coming from Mudabala.

Mudabala’s trajectory in Brazil

The sovereign wealth fund entered Brazil in 2012, investing US$2 billion in Eike Batista's companies, before his fall. It then became the main creditor of Batista's EBX group, taking ownership of significant assets, including stakes in ports and mines. 

Mubadala Capital currently has assets in Brazil, such as organizing the São Paulo Formula 1 Grand Prix. Fahlgren describes the company's approach in the country as contrarian, standing firm during economic and political crises over the past decade. The company also closed its second fund focused on Brazil, accumulating US$710 million in commitments last year.