Brazil utility wins control of 902.5-MW Luis Eduardo Magalhaes

Utility Energias do Brasil (EDB) has acquired 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), said the agreement was executed June 19 with Grupo Rede, one of EDP’s partners in developing Magalhaes. (HNN 11/23/05)

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 deal is subject to approval of Brazil electricity regulator Agencia Nacional de Energia Eletrica and to other contractual and governance procedures.

The agreement allows EDB to consolidate its position in Investco, increasing its voting stake to 73 percent from 27.65 percent.

“This swap will allow EDB to raise its generation capacity to 1,700 MW from the current 1,000 MW on the basis of an asset that we know and has no risks,” EDP Chief Executive Antonio Mexia said.

Magalhaes is operated under a 35-year concession until 2032. Electricity is sold under long-term contract to Grupo Rede distribution utilities.

Mexia said EDB already operates a hydroelectric project on the Tocantins River, allowing it to obtain synergies from the two projects.

Other hydro projects operated by EDB include 452-MW Peixe Angical on the Tocantins (HNN 11/29/06), 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. (HNN 2/28/08)

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