Brazil awards contract for 3,300-MW Jirau, licenses 3,150-MW Santo Antonio

Brazilian agencies have awarded a concession contract for 3,300-MW Jirau hydroelectric project and an environmental license for its sister project on the Madeira River, 3,150-MW Santo Antonio.

Mines and Energy Minister Edison Lobao signed the Jirau concession contract August 12 with Consorcio Energia Sustentavel do Brasil, winner of a May concession auction for development of Jirau in Rondonia State. (HNN 8/7/08) It offered an electricity sale price of 71.40 reais (US$43.26) per megawatt-hour, a 22 percent discount from the price cap of 91 reais (US$55.13).

Consorcio Energia Sustentavel do Brasil includes:
o Suez Energy South America Participacoes Ltda., a unit of French utility Suez, (50.1 percent);
o Eletrosul Centrais Eletricas S/A (20 percent);
o Companhia Hidro Eletrica do Sao Francisco (CHESF) (20 percent); and
o Camargo Correa Investimentos em Infra-Estrutura S/A (9.9 percent).

On August 11, Brazil’s environmental agency, Brasileiro do Meio Ambiente e dos Recursos Naturais Renovaveis (Ibama), issued an environmental license for construction of Santo Antonio. Environment Minister Carlos Minc said Ibama issued the license in record time, complaining that the project consortium, Consorcio Madeira Energia, failed to file some important documents until the last minute.

Consorcio Madeira Energia includes:
o Furnas Centrais Eletricas S/A (39 percent);
o Odebrecht Investimentos em Infra-estrutura Ltda. (17.6 percent);
o Construtora Norberto Odebrecht S.A. (1 percent);
o Andrade Gutierrez Participacoes S/A (12.4 percent);
o Cemig Geracao e Transmissao S/A (10 percent); and
o Fundo de Investimentos e Participacoes Amazonia Energia, formed by banks Banif and Santander, (20 percent).

Ibama imposed about 40 conditions on the environmental license including that the consortium �adopt� Mapinguari National Park and Jaru Ecological Station and finance water supply and basic sanitation projects costing 30 million reais (US$18.5 million).

Consorcio Madeira also is required to guarantee resources for monitoring of two aboriginal reserves and for programs of environmental education of the local population. It also is to provide 6 million reais (US$3.7 million) for equipment purchases for firefighters and forest rangers of Rondonia.

The national water agency, Agencia Nacional de Aguas, also required the consortium to study future construction of a canal lock at the project.

The Jirau and Santo Antonio dams would be built 84 kilometers and 119 kilometers from the Bolivian border on the Madeira, an Amazon River tributary. The two hydro projects, with 44 turbines each, have an estimated cost of 22 billion reais (US$11.6 billion). Santo Antonio is expected to begin delivering power in 2012 under a 30-year contract. Jirau is expected to go on line in 2013.

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