Urca raises $1.2mn with power crypto tokens: Correction

Corrects relationship between ENC Energy and Urca.

Brazilian power trading company Urca Trading has raised R6mn ($1.18mn) by selling cryptocurrency tokens backed by power contracts, earmarking the funds for investments in carbon certificates and other renewable energy certifications.

Urca Trading, a subsidiary of renewable energy company Urca,was able to raise the funds in 32 hours on a cryptocurrency brokerage by selling 60,000 tokens it created.

This was the biggest "tokenizing" of energy in Brazil history, the company said.

The idea was to create a product like a bank deposit certificate that instead draws money from small individual investors, Urca's cofounder Pedro Assumpcao and trading executive director Henrique Calogeras said. The tokens are backed by AAA- and AA-rated power contract receivables and promise to pay investors at an 18pc yearly rate, well above the Brazilian base rate, they said.

Urca's plants can issue international RECs (I-RECs), Gas RECs for biogas and other carbon certificates. The R6mn raised will go towards structuring new products and trading environmental assets. "We have taken strides to monetize environmental assets and our next step is thinking of products with them," Assumpcao said.

ENC Energy was the first biogas generation company to issue I-RECs in Brazil. It sold 254,000 I-RECs in 2021 to Ecom Energy.

Urca considered issuing Gas-RECs from its biomethane plant at the Seropedica landfill site in Rio de Janeiro state, executive director Marcel Jorand told Argus last February.

The company intends to study launching new cryptocurrency tokens, such as products modeling derivative investments. "We want to think of ways of sharing risks and upsides with small investors on the medium term," Calogeras said. Tokenizing contracts could be a new way to structure commodities contracts in general, according to Assumpcao and Calogeras.

By Rebecca Gompertz