SAO PAULO, Aug 4 (Reuters) - Renova Energia SA, a large renewable energy producer in Brazil, has decided to cut 4 billion reais ($1.25 billion) from its investment plan as the company tries to adjust its projects pipeline to reduced capital availability.
Renova executives said during an earnings conference call on Thursday that the company will scrap projects for 676 megawatts of wind and 60 MW of solar generation.
“Those investments will no longer be executed,” Investor Relations Director Paulo Ferreira said. “(The decision) will substantially improve our cash position... we are resizing our portfolio,” he said.
The investment cut reduces Renova’s expansion plan in Brazil through 2020 by 26 percent. The company now plans to reach 2 gigawatts in generation capacity by that year instead of 2.7 GW previously projected.
A failed deal late last year between Renova, which is controlled by Companhia Energetica de Minas Gerais SA , and SunEdison Inc sharply reduced Renova’s expected cash position and compromised its long-term investment plan.
The deal included a substantial assets sale to SunEdison’s TerraForm Global worth around 13.4 billion reais, which was canceled.
Ferreira said the company is negotiating with the government the cancellation of licenses awarded to build and operate wind and solar installations in Brazil.
Companies which win those licenses in regular auctions are subject to heavy fines if they do not execute the projects.
$1 = 3.203 reais Reporting by Luciano Costa; Writing by Marcelo Teixeira; Editing by Marguerita Choy