Mubadala Capital has signed an MOU with Brazilian state-owned petroleum company Petrobras for a potential investment in a biofuel project in Bahia, Brazil.

The agreement follows the development of biorefinery project to produce renewable and sustainable aviation fuel derived from the native Brazilian crop Macauba.

Oscar Fahlgren, chief investment officer and head of Brazil, Mubadala Capital, said the production of renewable energy from crops has the potential to positively transform Brazil and the global energy landscape for generations to come.

“This agreement underscores Mubadala Capital and Petrobras’ shared commitment to energy transition, and we are excited to work alongside Petrobras to create a novel, carbon neutral, product that will speed up the transition into a sustainable future.”

Mubadala Capital is the wholly owned asset management subsidiary of Abu Dhabi sovereign investor Mubadala Investment Company.

(Reporting by Imogen Lillywhite; editing by Seban Scaria)