Energy concessions raise R$ 16 billion in public revenue

Energy concessions raise R$ 16 billion in public revenue

Chamber Articles Category: Energy Post Date: 10/02/17 Source: BrazilGovNews By: BrazilGovNews
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The government has just raised R$ 16 billion in revenue through the energy concessions programme. The results of the auctions held on Wednesday (27) were assessed as better than expected by both the government and financial market analysts, with winning bids above the minimum set amount in all tenders.

The concession of four hydroelectric plants operated by the Minas Gerais Electric Company (Cemig) alone generated a 9.37% premium over the minimum bid. With the auctions, the hydroelectric plants of São Simão (GO/MG), Jaguara (MG/SP), Miranda (MG) and Volta Grande (MG/SP) will be operated by the private sector for the next 30 years.

The auction for São Simão, the largest hydro plant of the four, was won by China's State Power Investment Group, while the Jaguara and Miranda plants will be operated by the Engie Brasil consortium. Volta Grande, in turn, had its concession auction won by Enel Brasil.

According to the rules set forth in the bid notice, the auction of the plants occurred simultaneously. The winner was the bidder that offered the highest signing bonus (i.e. the initial fixed payment for receiving the concession), comprising the minimum bid amount and the goodwill offered above it. This amount will be paid at the signing of the contracts.

Through social networks, President Michel Temer assessed the results as positive for the country. "We have definitively recovered the world's trust in Brazil. The Cemig plant auctions yielded R$ 12.13 billion, beating market expectations", he said. Read Full Article