The Brazilian government aims to complete the privatization of national power company Eletrobras by January 2022 and to raise BRL25 billion (US$4.75 billion) from the process.
According to BNamericas, Brazilian President Jair Bolsonaro delivered a provisional measure to Congress in February 2021, allowing the national development bank BNDES to start Eletrobras’ privatization process. The aim is to capitalize the company via a primary offering, diluting the government’s stake and ensuring private sector control.
Brazil directly controls 42.57% of Eletrobras’ total capital. In addition, 10.23% are owned by the federal government through BNESPAR, 5.92% through BNDES and 2.97% through government funds, raising the total state-owned interest to 61.69%. The remaining 38.31% of Eletrobras’ capital is held by public investors and traded on B3 (Brazil, Bolsa, Balcão), the New York Stock Exchange (NYSE) and the Madrid Stock Exchange.
The government is expected to reduce its stake in the company from about 62% to 45%.
Eletrobras, which is the largest power utility in Brazil, owns 210 companies, including eight main subsidiaries and 173 joint ventures, as well as stakes in 29 companies. The group has a production capacity of 51.1 GW, which represents 30% of the country’s capacity (2019). The company also manages about half of the transport network, with 71,000 km of transmission lines.
The privatization will exclude two affiliates of Eletrobras: Brazil’s nuclear energy company Eletronuclear and its 50% stake in Itaipu Binacional, the operator of the 14-GW Itaipu binational hydropower plant, a partnership with Paraguay.
Opponents of the privatization argue Eletrobras must be under federal control because it is responsible for 30% of power generation in Brazil and has strategic transmission lines and hydro dams.