Brazil Potash Signs Memorandum of Understanding for ~$200m Power Line Construction and $20m Investment With Fictor Energia

Rhea-AI Summary

Brazil Potash (NYSE-American: GRO) has signed a significant MOU with Fictor Energia for two major agreements: the construction of a ~102-mile power transmission line and a strategic equity investment. Under the agreement, Fictor Energia will fund the ~$200 million power line construction cost for the Autazes Project, removing this expense from Brazil Potash's construction budget.

The power line will supply 300MW per year of ~80% renewable sourced electricity, with ownership transferring to Brazil Potash after 25 years. Additionally, Fictor Energia plans to invest $20 million in equity through two tranches: $2 million upon signing the definitive agreement and $18 million upon receiving the power line installation license.

The infrastructure is expected to be operational by July 2029, aligning with the Autazes Project's production timeline.

Positive

• Removal of ~$200 million power line construction cost from Brazil Potash's budget
• Strategic $20 million equity investment from Fictor Energia
• Secured long-term power supply with 80% renewable energy source
• Infrastructure timeline aligns with project production schedule
• Power line ownership transfers to Brazil Potash after 25 years

Negative

• MOU is non-binding with no guarantee of definitive agreement
• Long construction timeline with completion not expected until July 2029

Insights

Project Finance Specialist

Brazil Potash secures $200M infrastructure funding and $20M investment, significantly reducing capital requirements for its Autazes Project.

Brazil Potash has signed a strategic MOU that addresses one of the most critical aspects of mining project development - infrastructure financing. The agreement with Fictor Energia effectively removes $200 million from Brazil Potash's capital expenditure requirements by shifting the power line construction costs to their partner. This represents a significant de-risking of the Autazes Project's financial structure.

The Build, Own, Transfer model is particularly advantageous for Brazil Potash. Under this arrangement, Fictor Energia assumes all development, permitting, construction, and operational responsibilities for the 102-mile power transmission infrastructure, while Brazil Potash secures its critical power needs of 300MW annually. After 25 years, the company gains ownership of these assets without the upfront capital burden.

The additional $20 million equity investment structured in two tranches is cleverly tied to project milestones: $2 million upon definitive agreement signing and $18 million upon receipt of the power line installation license. This milestone-based funding provides Brazil Potash with near-term capital while creating aligned incentives for regulatory approval progress.

The fact that the power transmission infrastructure represents the only major offsite infrastructure requirement for the project means this agreement addresses a crucial development bottleneck. The 2029 operational timeline aligns with the project's production schedule, suggesting careful integration of the infrastructure development with the broader project timeline.

Mining Industry Analyst

This MOU represents a substantial operational advantage for Brazil Potash's Autazes Project. By securing power infrastructure - typically one of the most challenging aspects of remote mining operations - the company has addressed a crucial technical hurdle. The 300MW annual supply from Brazil's grid, with ~80% renewable sources, not only ensures operational reliability but also positions the project favorably from an ESG perspective.

The power infrastructure agreement is particularly valuable considering the project's location in Brazil, where regulatory complexities and construction challenges can create significant delays. Having a specialized partner like Fictor Energia handle the permitting and construction of this critical 102-mile power line removes a major execution risk from Brazil Potash's direct responsibility.

While the MOU is non-binding and definitive agreements remain to be finalized, the immediate commencement of preliminary engineering and regulatory processes by Fictor Energia signals confidence in the partnership's viability. The 2029 timeline for power infrastructure completion suggests a realistic assessment of the regulatory and construction timelines in Brazil's complex permitting environment.

For context, potash mining operations require significant electricity for processing, material handling, and mine ventilation systems. Having secured this essential input at a predetermined cost structure improves the overall economic predictability of the Autazes Project. Additionally, by removing $200 million from their capital expenditure requirements, Brazil Potash improves its project economics and potentially enhances its ability to secure the remaining financing needed for mine development.

• Construction of ~102 mile long power line is the only major offsite infrastructure required by the Autazes potash project
• Fictor Energia will fund ~$200M power line construction cost removing this from the Autazes Potash project total construction cost
• Fictor Energia also plans to invest $20 million of equity in two tranches
  

MANAUS, Brazil, July 14, 2025 (GLOBE NEWSWIRE) -- Brazil Potash Corp. ("Brazil Potash" or the "Company") (NYSE-American: GRO), a mineral exploration and development company with a critical mineral potash mining project, the Autazes Project (the “Project”), today announced the signing of a non-binding Memorandum of Understanding (MOU) with Fictor & WTT S.A. ("Fictor Energia"), part of the infrastructure division of Fictor Group, a leading Brazilian private equity firm. The MOU outlines terms for Fictor Energia to fund ~$200 million in power transmission construction costs for the Autazes Project while securing long-term energy supply and a $20 million strategic equity investment.

Partnership Highlights
Under the terms of the MOU, Fictor Energia would undertake complete development, permitting, construction, and operation of the power transmission infrastructure to supply 300MW per year of ~80% renewable sourced Brazil grid electricity for the Autazes Project through a Build, Own, Transfer model. After 25 years of operation, ownership of the electrical power line and associated substation to be transferred to Brazil Potash.

Fictor Energia assumes full responsibility for the ~$200 million power transmission capital expenditure, removing this major infrastructure investment from Brazil Potash's construction budget. Additionally, Fictor Energia plans to invest $20 million equity into Brazil Potash in two tranches: 1) $2 million upon signing of the definitive partnership agreement; and 2) $18 million upon receipt of the power line installation license.

Next Steps
The parties will work toward execution of definitive agreements, with Fictor Energia immediately beginning preliminary engineering and regulatory processes. There can be no assurance that the definitive documentation related to the transactions set forth in the MOU will be agreed upon or signed, or that, if signed, such transactions will be consummated, or of the final terms and conditions related to such transactions. The power transmission infrastructure would be expected to be completed and operational by July 2029, aligning with the Autazes Project's planned production timeline.

Corporate Update
The Company also announces that Raphael Bloise has been appointed as the Interim President of Potassio do Brasil Ltda, the Company’s wholly owned Brazilian subsidiary.

About FICTOR GROUP
Fictor is a holding company with 18 years of private equity experience. Operating in strategic sectors for Brazil, the company has three main divisions: food industry, financial services, and infrastructure. Headquartered in the Berrini area of São Paulo, Fictor's purpose is to generate sustainable value for businesses shaping Brazil’s vital sectors.

About Brazil Potash
Brazil Potash (NYSE-American: GRO) (www.brazilpotash.com) is developing the Autazes Project to supply sustainable fertilizers to one of the world’s largest agricultural exporters. Brazil is critical for global food security as the country has amongst the highest amounts of fresh water, arable land, and an ideal climate for year-round crop growth, but it is vulnerable as it imported over 95% of its potash fertilizer in 2021, despite having what is anticipated to be one of the world’s largest undeveloped potash basins in its own backyard. The potash produced will be transported primarily using low-cost river barges on an inland river system in partnership with Amaggi (www.amaggi.com.br), one of Brazil’s largest farmers and logistical operators of agricultural products. With an initial planned annual potash production of up to 2.4 million tons per year, Brazil Potash’s management believes it could potentially supply approximately 20% of the current potash demand in Brazil. Management anticipates 100% of Brazil Potash’s production will be sold domestically to reduce Brazil’s reliance on potash imports while concurrently mitigating approximately 1.4 million tons per year of GHG emissions.

Cautionary Note Regarding Forward-Looking Statements
All statements, other than statements of historical fact, contained in this press release constitute "forward-looking statements" and are based on the reasonable expectations, estimates and projections of the Company as of the date of this press release. The words "plans," "expects," or "does not expect," "is expected," "budget," "scheduled," "estimates," "forecasts," "intends," "anticipates," or "does not anticipate," or "believes," or variations of such words and phrases or statements that certain actions, events or results "may," "could," "would," "might," or "will be taken," "occur" or "be achieved" and similar expressions identify forward-looking statements. Forward-looking statements include, without limitation, statements regarding the MOU; advancement of the Autazes Project including specifically the powerline construction; the impact of the potential transaction with FICTOR and the benefits and structure of such transaction; and the status of the Company's project. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by the Company as of the date of such statements, are inherently subject to significant business, economic and competitive uncertainties and contingencies. The Company disclaims any intention or obligation to update or revise any forward-looking statements, except to the extent required by applicable law. The reader is cautioned not to place undue reliance on forward-looking statements.

Contact:

Brazil Potash Investor Relations

info@brazilpotash.com

FAQ

What is the value of the power line construction agreement between Brazil Potash and Fictor Energia?

Fictor Energia will fund approximately $200 million for the construction of a 102-mile power transmission line for the Autazes Project.

How much equity investment is Fictor Energia making in Brazil Potash (GRO)?

Fictor Energia plans to invest $20 million in two tranches: $2 million upon signing the definitive agreement and $18 million upon receiving the power line installation license.

When will the Brazil Potash (GRO) power transmission infrastructure be completed?

The power transmission infrastructure is expected to be completed and operational by July 2029, aligning with the Autazes Project's production timeline.

What is the power capacity and source for Brazil Potash's Autazes Project?

The power line will supply 300MW per year of electricity, with approximately 80% coming from renewable sources from the Brazil grid.

Who will own the power transmission infrastructure for Brazil Potash's project?

Fictor Energia will initially own and operate the infrastructure through a Build, Own, Transfer model. After 25 years of operation, ownership will transfer to Brazil Potash.