Microsoft has signed a deal with energy procurement platform Powertrust to support the deployment of 270MW of solar power across Mexico and Brazil over the next four years.

Under the terms of the agreement, Microsoft will purchase Renewable Energy Certificates (RECs) generated by the projects.

“Microsoft is committed to building a more sustainable future in which communities can prosper,” said Danielle Decatur, director, Microsoft energy team. “Our collaboration with Powertrust reflects our belief that enables new sustainability infrastructure that is fairly developed and enhances the health, safety, and overall well-being of local communities.”

According to the companies, the deal is designed to deliver “transformational benefits to local communities,” serving areas with limited to no access to low-carbon energy. The companies also intend to partner with local NGOs and community leaders to ensure inclusive project development, as well as create local jobs, enable energy savings, and support workforce development within the renewable energy sector.

“This collaboration with Microsoft is a powerful example of how corporate climate leadership can go hand-in-hand with community empowerment,” said Nick Fedorkiw, CEO of Powertrust. “By investing in distributed solar in Mexico and Brazil, we’re not only accelerating the clean energy transition, but also delivering tangible benefits to the people who need it most.”

RECs are a form of offset in which companies can purchase a representation of the energy generated by renewable energy sources, transferring the "renewable" aspects of the energy to the REC's owner. When a provider generates 1MWh of renewable power, it is issued with a REC. If someone uses that power, they can retire that REC and add that 1MWh to their green energy total.

Significant controversy exists over the utility of RECs, with many considering them the lowest-quality renewable energy investment. RECs lack a guarantee that the renewable energy produced will be consumed or that the capacity was built to match the demand. As a result, many within the industry have advocated for Power Purchase Agreements (PPAs) over RECs as the more sustainable option.

Microsoft has not signed many renewable energy contracts within the LATAM market. In September 2023, the company inked a 15-year PPA with AES Brazil for 154MW of power from the Cajuína Wind Complex in Rio Grande do Norte.

However, Microsoft has invested significant capital in building its presence across the region. Last September, it announced that it would invest 14.7 billion Reais ($2.7 billion) in its cloud and artificial intelligence infrastructure in Brazil over three years.