Investing in accountability: why Victory Hill chose sustainability certification
The Mascarenhas Hydropower Plant, Espírito Santo, Brazil
The global energy transition must be grounded in trust and accountability. Investors and stakeholders increasingly expect not just more renewable capacity, but evidence that projects are managed responsibly and operated to the highest environmental and social standards. This conviction has shaped the mission of VH Global Energy Infrastructure plc (“ENRG”) since its launch in February 2021.
Managed by Victory Hill Capital Partners LLP (“Victory Hill”) and listed on the premium segment of the London Stock Exchange, ENRG is a specialist investment fund focused on energy infrastructure, with a sustainability impact objective.
For those familiar with fund classifications, ENRG carries the FCA’s sustainable impact label and is an SFDR Article 9 fund, meaning that its investment strategy includes measurable sustainability outcomes. Every investment must perform financially and support the energy and infrastructure-related Sustainable Development Goals (SDGs), including SDG 7 (Affordable and Clean Energy), SDG 13 (Climate Action), and SDG 9 (Resilient Infrastructure). If a project does not align with these thresholds, it does not pass the first stage in our investment process.
The Mascarenhas Hydropower Plant is on the Doce River in Espírito Santo, Brazil
Hydropower in Brazil: a complementary fit
In 2022, ENRG acquired the Mascarenhas Hydropower Plant in Espírito Santo, Brazil. A 198 MW run-of-river facility with a proven 50-year operational track record, capable of supplying baseload renewable power to one of the world’s cleanest electricity grids.
The investment was about more than just operational stability, it was also an opportunity to strengthen the portfolio’s impact in Brazil, where ENRG is also developing a solar PV programme. Solar is critical to the transition, but it is intermittent. Hydropower, by contrast, provides a stable, baseload generation. Together, they create complementary systems and ENRG can contribute to a more resilient and balanced system, helping Brazil meet its growing demand while avoiding increased reliance on fossil fuels.
This mix of hydro and solar PV made Mascarenhas an ideal addition to ENRG’s portfolio and directly advanced its sustainability objectives. It also reflected a broader principle that the energy transition is not only about how fast megawatts are added, but about the quality and resilience of the systems built.
Why certification?
The decision to invest in Mascarenhas met the fund’s criteria by delivering clean energy, supporting climate action, and strengthening infrastructure resilience. Victory Hill, as investment manager, believes our responsibility does not stop at acquisition. Stewardship is central to our approach, and that means ensuring assets are operated in ways that create long-term value for people, nature and investors.
Hydropower, while renewable, brings complex social and environmental dynamics including, but not limited to, water quality, biodiversity, sedimentation, and cultural and community engagement. ENRG and Victory Hill wanted to demonstrate to investors that Mascarenhas was being managed to the highest international standards.
That is why we pursued the Hydropower Sustainability Standard (HSS) – a rigorous, sector-specific benchmark for the hydropower sector. Unlike generic frameworks, the HSS goes deeper into the realities of operating a hydropower asset covering community engagement, labour conditions, watershed management and cumulative impacts along a river basin.
We gave our operating partner, Paraty Energia, three years to achieve the certification. Remarkably, the team reached Gold level in just two years, a result that demonstrated the power of having clear sustainability targets embedded at the outset.
Sustainability value creation
Certification has created value for ENRG and its investors in ways that extend beyond traditional due diligence. As a London-based team investing globally, we rely on strong local partners, and certification provides an independent layer of assurance. It confirms that the Mascarenhas plant is being managed responsibly and transparently, giving investors’ confidence that our standards are being upheld in practice.
The HSS is not an end point, but a framework for continuous improvement. It complements the ISO 14001 and ISO 45001 systems already in place at Mascarenhas, ensuring that sustainability performance evolves in line with rising expectations and best practice. This creates a roadmap that allows the plant to improve over time.
The certification process also deepened the plant’s connection with its surrounding communities and sharpened focus on biodiversity and water management. These outcomes go beyond reputational benefit, as they strengthen resilience and improve the long-term value of the asset. Third-party certification not only supports investor confidence but also reduces operational risk, differentiates ENRG in the market, and strengthens our positioning for green finance.
Certification also reinforces accountability. Responsible investment is active investment, and in today’s environment of heightened scrutiny, ESG claims must be backed with evidence. Sustainability is complex and evolving, touching interconnected economic, social, and environmental systems. It cannot be assumed based on a single metric such as renewable energy produced or carbon emissions avoided. Certification provides clarity through independent assessment across many performance indicators, creating a bridge between ENRG’s fund-level objectives and the realities of day-to-day asset operation.
We also believe that legacy assets have a vital role to play in the energy transition. Mascarenhas may be fifty years old, but with responsible management it is contributing to today’s transition. Revitalising and upgrading existing assets can, in many cases, be just as impactful as constructing new ones, and it is through this stewardship approach that certification helps us create additional sustainable value.
Looking ahead
Mascarenhas is now one of the first hydropower plants in Brazil to achieve Gold under the HSS. This milestone is not the end of the journey, but part of a long-term commitment. Certification provides a framework to address challenges systematically. We want to leave the plant and its environment better than we found it.
For ENRG, Mascarenhas illustrates how sustainability certification enhances both investment objectives and operational management. It demonstrates how an investment that already met our impact objectives could, through operational management and accountability, generate additional sustainable value by supporting our investors, our partners, and the communities we serve.
At Victory Hill, this reflects our vision for financing the energy transition – investing in high-quality projects that create lasting benefits, aligning stakeholders through shared frameworks, and using standards not as endpoints but as tools for continuous improvement.
Victory Hill is committed to building infrastructure that accelerates the energy transition in a way that is resilient, inclusive and accountable.
You can read more about the Hydropower Sustainability Standard, or get in touch to arrange a call with our team.
AUTHOR
