UPDATE – Brazil delays concession auction for 3,150-MW Santo Antonio

Brazil’s energy minister announced a concession auction to build and operate the 3,150-MW Santo Antonio hydroelectric project will be delayed a month, into late November.

Brazil’s Ministerio de Minas e Energia had set October 30 for the concession auction of Santo Antonio, one of the two big projects comprising the 6,450-MW Madeira River complex. (HNN 9/25/07) Reports previously indicated the auction might be delayed due to the extensive time needed to prepare rules and because some companies are taking longer than expected to form bidding consortia.

Santo Antonio and it sister project, 3,300-MW Jirau, also on the Madeira, previously were delayed by a complicated environmental licensing process and more recently by the federal accounting watchdog TCU, which has to rubberstamp the project.

“We will have the auction in the last two weeks of November,” acting Mines and Energy Minister Nelson Hubner said October 2.

Hubner said there are four consortia interested in building and operating Santo Antonio in Rondonia State.

Suez Energy Brasil, a unit of France’s Suez, seeks the concession jointly with Brazil’s Centrais Eletricas do Sul do Brasil (Eletrosul), part of federal power giant Centrais Eletricas Brasileiras S/A (Eletrobras). Construction conglomerate Construtora Norberto Odebrecht and state power company Furnas Centrais Eletricas make up another consortium.

The other two are engineering group Camargo Correa with power firm Companhia Hidreletrica do Sao Francisco (Chesf) and engineering firm Alusa with Centrais Eletricas do Norte do Brasil (Eletronorte), another Eletrobras unit.

Hubner also said power distributors like CPFL Energia, Light, and Companhia Energetica de Minas Gerais (Cemig) are considering their participation, on their own or in consortia.

Odebrecht is fighting in courts to defend exclusive contracts for Santo Antonio, but Hubner said that would not delay the auction further, acknowledging though it could reduce the competition for the concession.

A technical presentation on the feasibility studies of Santo Antonio is available on the Internet site of Brazilian electricity regulator Agencia Nacional de Energia Eletrica (ANEEL). The presentation, available at www.aneel.gov.br/complexomadeira, includes a video recording of a clarification session presented by the companies that developed the studies, Odebrecht and Furnas. Also available are numerous documents on Santo Antonio and Jirau.

The ministry also said an auction will be held in 2008 for a concession to build the transmission line linking Santo Antonio to the national grid. Jirau is expected to be auctioned in early 2008.

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.

For information, contact ANEEL at (55) 61-21928906; E-mail: institucional@aneel.gov.br.

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