Executive Summary
In the 2025-2026 biennium, Brazil exhibited a dual dynamic in energy investments: on the one hand, significant public funding for renewables, particularly in the Northeast; on the other hand, the acceleration of oil projects in the pre-salt layer. In the Northeast region, which concentrates 82.3% of the country’s installed solar and wind capacity, BNDES allocated 10 billion reais for clean energy, including 1 billion for the construction of 11 photovoltaic plants in Arinos (Minas Gerais) with a capacity of 505 MW, which began in early 2026. During the same period, companies in the sector suspended investments totaling 38.8 billion reais (including 141 projects worth 18.9 billion) due to increased operating costs and the loss of tax benefits.
Offshore wind power made significant progress: in June 2025, Ibama issued the first preliminary license for a 24.5 MW project in Areia Branca, while by the end of 2025, there were 103 license requests for a total capacity of 244.5 GW. The technical potential of offshore wind power is estimated at 697 GW (according to the World Bank and EPE, up to 1,200 GW). The first offshore wind auction, initially scheduled for 2026, was postponed to 2027 after the regulatory decree was published in the first half of 2026. Financing for offshore projects is provided through agreements between BNDES and Banco do Nordeste (41 billion reais) and between BNDES and CEXIM (a fund of 1 billion dollars, active from 2026).
Parallelly, investments in oil, especially in the pre-salt layer, continue to dominate. Petrobras announced an investment plan of 109 billion dollars for the 2026-2030 period, of which 91 billion are allocated to the implementation of projects. In 2025, pre-salt production reached 4.897 million barrels equivalent per day, with a peak of 5.160 million in July. In 2026, funding for the energy transition was reduced by 20%, with a 58% decrease in investments in wind and solar energy. In June 2025, Ibama suspended authorization for a 196.4 billion reais project due to the absence of a detailed climate plan. The sixth pre-salt oil sales auction is scheduled for July 2026, with 106.5 million barrels from six fields.
In South Africa, Eskom recorded 300 consecutive days without scheduled power outages (load shedding) from April 1, 2025, to March 12, 2026, thanks to the improvement in energy availability factor (EAF) to 65.85% and the reduction in unexpected power losses from 16.5 GW (2023) to 9.1 GW (March 31, 2026). A significant event was the completion of Unit 6 of the Kusile power plant, which occurred on September 29, 2025, adding 800 MW to the grid. With the generation recovery plan, 7.8 GW of capacity has been restored since 2023, while the consumption of diesel for open-cycle gas turbine (OCGT) turbines decreased by 57.35% between April 2025 and March 2026, saving 6.38 billion rand.
In 2025, Eskom presented a five-year investment plan of 320 billion rand, which includes 5.9 GW of new clean generation. The Integrated Resources Plan (IRP 2025) provides for the extension of the operational life of 10 coal-fired power plants. In 2025, the South African government and international partners (EU, United Kingdom, Denmark, France, Germany, Netherlands) announced the “Just Energy Transition Partnership” (JETP) with 10 billion dollars. In 2026, Germany, through KfW, made available 23 million euros for the de-risking of 24 strategic green hydrogen projects. In 2025, the project for a hydrogen plant in Coega was announced, funded with 20 million dollars from the SA-H2 Fund, with commercial start-up scheduled for 2029.
In 2026, several green hydrogen projects are active in South Africa: the 1 GW electrolyzer of the CSIR, the 110 kW electrolyzer of the Wits-South Africa Hydrogen Localisation Initiative, and the Prieska Power Reserve project with an annual production of 80,000 tons of hydrogen. BurnStar Technologies and Mitochondria Energy Company signed an agreement for the supply of turquoise hydrogen for 15 fuel cell systems of 50 kW each, with start-up scheduled for the end of 2026. In the African continent, 78 green hydrogen projects have been identified with a total capacity of 38 GW and investments of 194 billion dollars, with South Africa, Egypt, and Morocco among the leaders.
The most relevant aspect is the simultaneous expansion of large-scale projects in Brazil in the renewable and pre-salt sectors, while funding for transition technologies decreases, creating a tension between climate commitments and economic strategies. In South Africa, the achievement of 300 consecutive days without load shedding confirms a greater stability of the electricity system, although the long-term sustainability depends on the implementation of plans for the transition to clean energy and the integration of renewable sources.
Part I – Brazil: Renewable Energy, Offshore Wind Power, and Pre-Salt
In 2025-2026, Brazil showed a contradictory trend in energy investments: significant capital injections into renewables, particularly in the Northeast, and a simultaneous acceleration of oil projects in the pre-salt layer, accompanied by a reduction in funding for transition technologies. A key event was the approval by BNDES of a financing of 1 billion reais (approximately $185.1 million) for the construction of 11 solar plants in Arinos, in the state of Minas Gerais, with a total capacity of 505 MW, which came into operation at the beginning of 2026. This project is part of a broader BNDES initiative that, in 2025, allocated 10 billion reais to clean energy projects in the Northeast, with a portion of the funds being non-refundable under the “Nova Indústria Brasil” program.
During the same period, a sharp decline in investments was observed in the Northeast: companies in the renewable energy sector suspended nearly 38.8 billion reais in investments between 2025 and 2026, considering the possibility of leaving the region due to increased operating costs and loss of tax benefits. This trend is confirmed by the fact that 141 solar and wind power plants suspended investments totaling 18.9 billion reais. Despite this, the Northeast remains dominant in renewables: it holds 82.3% of the total installed solar and wind power capacity in the country, including 30 GW of operational capacity and 78% of projects under construction. In 2025, 6,751.03 MW of capacity was added, including 2,464.04 MW of solar and 1,537.90 MW of wind power.
Offshore wind power has seen accelerated development. In June 2025, Ibama issued the first preliminary license for a project off the coast of Areia Branca (Rio Grande do Norte) with two wind turbines (8.5 MW and 16 MW) for a total capacity of 24.5 MW. The project, developed by the Senai Institute for Innovation in Renewable Energies (ISI-ER), must obtain the installation license within 18 months and become operational within 36 months. At the end of 2025, Ibama had registered 103 license requests for offshore projects with a total capacity of 244.5 GW; other estimates indicated 104 projects with a potential of 700 GW. The technical potential of offshore wind power is 697 GW, and according to the World Bank and EPE, it could reach 1,200 GW. The first auction was scheduled for 2026, but it was postponed to 2027 after the publication of the regulatory decree in the first half of 2026.
Financing for offshore projects is managed through joint initiatives by BNDES and Banco do Nordeste, which in March 2025 signed an agreement for 41 billion reais allocated to offshore wind power and green technologies. In addition, BNDES and the Export-Import Bank of China (CEXIM) signed an agreement for a fund of $1 billion (400 million from BNDES) to support energy transition, AI, infrastructure, mining, and agriculture projects in Brazil, which will become operational in 2026. In 2025, BNDES also financed 16 solar plants in 13 cities in nine states for a total of 156 million reais and 31 MW of capacity.
Investments in oil, particularly in the pre-salt layer, continue to dominate. Petrobras announced an investment plan of $109 billion (581.4 billion reais) for the period 2026-2030, of which $91 billion is allocated to project implementation and $18 billion to the evaluation phase. In 2025, the company invested $3 billion in renewables and the expansion of pre-salt projects. However, in 2026, funding for energy transition initiatives was reduced by 20%, with a specific decrease of 58% for wind and solar power. In 2025, pre-salt production reached 4.897 million barrels equivalent per day (+13.3% compared to 2024) and in July 2025 reached a record of 5.160 million barrels. During 2025, the Itapu fields (with FPSO P-71) and Búzios 6 (with FPSO P-78, capable of producing up to 180,000 barrels per day) came into production.
Development plans for the pre-salt layer include the construction of 11 new platforms (FPSO) by 2027, including the Sepetiba platform in the Mero field, with a capacity of 180,000 barrels per day. The fourth phase of the pre-salt in the Santos basin is expected to have a production of 773,000 barrels per day, which is 23% of the national extraction. In June 2025, Ibama suspended the authorization for a project worth 196.4 billion reais due to the lack of a detailed climate plan, a necessary condition to resume the authorization process. Petrobras also acquired 3.5% of the Mero field and 0.95% of the Atapu field, bringing its stakes to 41.4% and 66.38%, respectively. The sixth pre-salt oil sales auction is scheduled for July 2026, with 106.5 million barrels from the Mero, Itapu, Atapu, Sépia, Búzios, and Bacalhau fields.
Despite the contradictory trends, official statements confirm the intention of a balanced development. Petrobras has stated that it will maintain 31% of its energy matrix from renewable sources by 2050, while expanding production in the pre-salt layer. The Ministry of Mines and Energy (MME) has set a limit of 12 nautical miles for offshore wind power projects and expects to create 500,000 jobs in the sector by 2050. However, the lack of transparency in funding, the absence of data on direct investments in offshore projects, and the unavailability of information on specific construction costs make a complete economic analysis difficult. It is important to note that, despite the growth in renewable energy investments, a significant outflow of capital from the sector was recorded in 2025-2026, highlighting the vulnerability of the current development model.
The most relevant fact is that Brazil, in 2025-2026, is simultaneously developing large-scale projects in both the renewable energy sector and the pre-salt layer, while funding for transition technologies is being reduced, creating a tension between climate commitments and the economic strategy.
Part II – South Africa: Grid Stability, Green Hydrogen, and Critical Minerals
During the period from April 1, 2025, to March 12, 2026, Eskom recorded 300 consecutive days without load shedding, thanks to the improvement in the energy availability factor (EAF) and the reduction in unplanned outages. In these 12 months, the EAF was 65.85%; in the 2025-2026 fiscal year, it reached 65.35%, an increase of 4.75% compared to 2023-2024. A key factor was the reduction in unplanned power losses, which decreased from 16.5 GW in 2023 to 9.1 GW by March 31, 2026 (-44.5%). In the week of March 6-12, 2026, the average loss decreased from 15.382 GW to 7.224 GW (-53%).
Despite the improvement, 26 hours of outages were recorded in April and May 2025, indicating a persistent vulnerability in the system. However, from April 1 to August 31, 2026, Eskom does not anticipate any grid overloads, thanks to a 6 GW power reserve and the stable operation of the plants. A significant event was the completion of Unit 6 of the Kusile power plant, which occurred on September 29, 2025, adding 800 MW to the grid, bringing the total power of Kusile and Medupi to 9.6 GW. Unit 6 was commercially recognized from September 2025, although production began on March 23, 2025.
Eskom is implementing a generation recovery plan, which has restored 7.8 GW of capacity since 2023, including Unit 4 of Medupi and Unit 6 of Kusile. Thanks to this plan, an additional 4.0 GW of power has been added, reducing the consumption of diesel for open-cycle gas turbine (OCGT) turbines by 57.35% between April 1, 2025, and March 12, 2026, saving 6.38 billion rand. During the 2023-2026 period, the expenditure on diesel decreased overall by 26.9 billion rand (approximately $1.4 billion).
In 2025, Eskom announced a five-year investment plan of 320 billion rand, which includes the addition of 5.9 GW of clean generation. In 2026, the construction of 2 GW of renewable energy began. The long-term strategy, approved in 2025, aims to reduce coal capacity from 39 GW to 18 GW and reach 32 GW from renewable sources by 2040. At the same time, the Integrated Resources Plan (IRP 2025) extends the operational life of 10 coal-fired power plants, some of which will continue to operate for ten years longer than originally planned.
In 2025, the South African government and international partners (EU, UK, Denmark, France, Germany, Netherlands) announced the “Just Energy Transition Partnership” (JETP) with $10 billion. An additional $2.4 billion arrived in the form of bilateral contributions. In 2026, Germany, through KfW, allocated 23 million euros for de-risking key green hydrogen projects, including 24 projects classified as strategic. Within the same program, the green hydrogen project in Coega was presented in 2025, with $20 million from the SA-H2 Fund, with commercialization expected in 2029.
In 2026, several green hydrogen projects are underway in South Africa. The CSIR project, approved in May 2024 and launched in June 2025, includes a 1 GW electrolyzer capable of producing 72-88,000 tons of hydrogen per year, avoiding 0.7 million tons of CO2. The Wits-South Africa Hydrogen Localisation Initiative received 350 million rand (approximately $5.3 million) for an 110 kW electrolyzer. The Prieska Power Reserve project, supported by KfW and IDC, aims to produce 80,000 tons of hydrogen per year. BurnStar Technologies and Mitochondria Energy Company have signed an agreement to supply turquoise hydrogen to 15 fuel cell systems, each with a capacity of 50 kW (total capacity of 800 kW), with commissioning expected by the end of 2026.
In 2026, South Africa is strengthening cooperation with India and China on critical minerals. The agreement between India and Africa, confirmed on April 22, 2026, includes joint investments of $75 billion and a trade volume of approximately $100 billion in the platinum, manganese, and chrome sectors. China is South Africa’s main trading partner, with trade amounting to $36.4 billion in 2025. The United States, although announcing its withdrawal from the agreement in 2025, has provided $56 million in grants and potentially $1 billion in commercial investments.
In 2025, the Industrial Development Corporation (IDC) invested 160 million rand in eight companies owned by minorities for the development of critical minerals, including manganese, platinum, and graphite. As part of the Global Lobito Corridor, funded with $5 billion from the Partnership for Global Infrastructure and Investment, the logistics for the extraction and export of minerals will be modernized. In 2026, 78 green hydrogen projects were identified in Africa, with a total capacity of 38 GW and planned investments of $194 billion; South Africa, along with Egypt and Morocco, is among the leading countries.
Despite the improvements, in 2026 there remains a risk of increased unserved energy due to the decommissioning of 5.26 GW of coal-fired power generation in 2029-2030, which could cause critical blackouts in 2029. The economic losses due to outages in 2025 were estimated at 900 million rand per day, while the overall cost of the energy crisis, according to Greenpeace Africa, is 721 billion rand (38 billion dollars).
The most relevant finding is that Eskom achieved 300 consecutive days without scheduled interruptions as of March 12, 2026, demonstrating the resilience of the electricity system thanks to a massive recovery of production capacity and the reduction in diesel consumption. However, long-term stability depends on the implementation of clean energy transition plans and the integration of renewable sources.