Brazilian court nixes Cemig plan to halt four-plant auction

Brazilian courts have refused a suit filed by state-run utility Companhia Energetica de Minas Gerais that woud have stopped the sale of four hydropower projects later this month.

Covered by the decision are the 380-MW Volta Grande, 408-MW Miranda, 424-MW Jaguara and 1.71-GW Sao Simao — all of which Cemig had previously held the operating rights to until the company refused to terms of controversial energy sector reforms enacted by former president Dilma Rouseff.

Cemig filed a lawsuit with Brazil’s supreme court earlier this year when it was announced the government intended to sell the operating rights for the four plants in a move claimed to help the country meet its budget.

The government said in May that winning bidders will be required to pay at minimum $2 billion for Sao Simao, $570 million for Jaguara, $330 million for Miranda and $390 million for Volta Grande.

Terms of the sale say buyers must guarantee 70% of each project’s output for distribution via regulated market contracts, but that the remainder is eligible for sale on the free market. reported in June 2013 that Brazil’s Supreme Court had granted an injunction to Cemig to allow it to maintain control of Jaguara, which was challenged in June 2015 before courts yet again gave Cemig control of Jaguara via a temporary concession in December of the same year. A similar injunction was granted to Cemig for Miranda in December.

The auction — originally scheduled for April — will now be held September 27.

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Michael Harris formerly was Editor for

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