Brazil Potash signs MoU with Gera Center for energy contract

The agreement provides for the installation of a modular diesel power generation plant that will serve as the primary power source during the construction phase of the project and, subsequently, as an emergency backup system throughout the first 23 years of the mine's operation.

Gera Center was selected following a formal competitive process conducted by Brazil Potash, involving companies with proven experience in the Amazon region. According to the company, the BOOT structure will allow the transfer of approximately US$33 million in initial energy generation investments from the project's construction budget to operational costs spread over 28 years. The model is also expected to generate estimated net savings of approximately US$10 million over the life of the contract, compared to the values projected in the project's Preliminary Feasibility Study (PFS).

“This BOOT agreement with Gera Center provides reliable power for construction in a location where the electrical grid is not yet available, while also reducing the initial project deployment costs,” said Matt Simpson, CEO of Brazil Potash. “Gera Center was selected through a rigorous competitive process, and its proposal was approximately US$10 million below our project life-sustaining PFS estimates. The same plant that will supply power to construction will also act as an emergency backup system throughout the mine's life, representing one of up to five BOOT contracts the company is structuring as part of its project construction financing strategy.”

Details of the agreement

Under the terms of the MoU, Gera Center will be responsible for the supply, installation, operation, and maintenance of 63 modular, containerised, diesel-powered generator sets, with a maximum capacity of 20 MW.

The system will be implemented in stages, keeping pace with the growth in energy demand from the building, starting with 10 MW and reaching 20 MW during the first year. The first energy supply could occur within 120 days of the signing of the final contract.

Since there is no conventional grid power available on site during the implementation phase, the plant will fully supply the civil works and shaft excavation activities of the mine.

After the start of operations, the system will act as an emergency backup solution for 23 years, guaranteeing operational continuity in case of interruption of the main 500 kV transmission line that will connect the project to the National Interconnected System (SIN).

The contract stipulates a minimum operational availability of 98% during this phase, as well as a maximum response time of two hours for critical incidents. At the end of the 28-year contract, all generation infrastructure will be transferred to Brazil Potash.

Competitive process

The selection of Gera Center was conducted by Brazil Potash's project director, Raphael Bloise, through a formal competitive process involving 12 companies with proven experience in the Amazon region.

In total:

• 12 companies were invited;
• Eight submitted formal proposals;
• Four were selected for the final evaluation phase.

The proposals underwent technical and commercial refinements in face-to-face and virtual meetings with the technical teams involved.

According to Brazil Potash, Gera Center obtained the best technical and commercial evaluation considering the entire 28-year contract horizon, generating approximately US$10 million in savings compared to the budget foreseen in the PFS and reinforcing the company's strategy of structuring a large part of the project's non-essential infrastructure using the BOOT model.

Next steps

The parties will work together in the coming months to formalise the final contracts.

The company emphasises that the MoU is non-binding and therefore there is no guarantee that definitive contracts will be signed, nor that the transaction will be completed under the terms currently foreseen.

The expectation is that the system will be fully installed and providing primary power to the construction within the 120-day mobilisation window following the signing of the definitive contracts, in line with the shaft excavation schedule for the Autazes Potassium Project.

Read the article online at: https://www.worldfertilizer.com/potash/27052026/brazil-potash-signs-mou-with-gera-center-for-energy-contract/