Brazil utility completes deal for 902.5-MW Luis Eduardo Magalhaes

Utility Energias do Brasil (EDB) has completed an asset swap that secures EDB a controlling stake in the 902.5-MW Luis Eduardo Magalhaes hydroelectric project at Lajeado on the Tocantins River in Brazil’s Tocantins State.

EDB’s parent firm, Energias de Portugal (EDP), originally announced the agreement in June with Grupo Rede, one of EDP’s partners in developing Magalhaes. (HNN 6/20/08)

EDP said the approval of Brazil electricity regulator Agencia Nacional de Energia Eletrica had been secured and other contractual and governance procedures are complete, allowing the asset swap to be completed September 11.

EDB agreed to trade its ownership of Mato Grosso do Sul State distribution utility Empresa Energetica do Mato Grosso do Sul (Enersul) for Grupo Rede’s controlling stake in Investco, which operates the hydro project. The agreement allows EDB to consolidate its position in Investco, increasing its voting stake to 73 percent from 27.65 percent.

This transfer increases EDB’s generating capacity to 1,700 MW from 1,000 MW. Magalhaes is operated under a 35-year concession until 2032. Electricity is sold under long-term contract to Grupo Rede distribution utilities.

Other hydro projects operated by EDB include 452-MW Peixe Angical on the Tocantins, 198-MW Mascarenhas on Rio Doce in Espirito Santo State, 21-MW Paraiso in Mato Grosso do Sul, and 25-MW Sao Joao in Espirito Santo.

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