UPDATE – Brazil registers two groups to bid for 3,300-MW Jirau

Brazil’s electricity regulator has registered two utility-led consortia to bid in the May 19 concession auction of the 3,300-MW Jirau hydroelectric project on Brazil’s Madeira River.

Agencia Nacional de Energia Eletrica (ANEEL) identified one bidder consortium as Consorcio Jirau Energia, including:
o Federal utility Furnas Centrais Eletricas S/A (39 percent ownership);
o Fundo de Investimentos e Participacoes Amazonia Energia II (comprising banks Banif and Santander) (20 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); and
o Cemig Geracao e Transmissao S/A (10 percent).

ANEEL identified the other consortium as Consorcio Energia Sustentavel do Brasil, including:
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).

Additionally, ANEEL said it registered 32 distribution utilities to bid for purchase of power from Jirau at the same time as the May 19 concession auction. The concession auction has been postponed twice, from May 12 and May 9. (HNN 4/30/08)

Suez announced last week it plans to auction Jirau project power May 16 to free market purchasers — before the May 19 concession auction — to help set its price bid for the Jirau concession. (HNN 5/7/08)

ANEEL extended registration of interested bidders to May 14. Guarantees of participation and delivery of passwords to participate in the electronic auction are to occur May 14. The auction is to be carried out electronically on May 19, in a closed environment at ANEEL headquarters in Brasilia.

ANEEL set an auction price ceiling of 91 reais (US$54) per MWh for Jirau, which is expected to require a total investment of 8.7 billion reais (US$5.18 billion). The bidder offering the lowest rate for the project’s electricity is to win the concession to build and operate Jirau, which is expected to go on line by 2013.

The concession holder is to sell at least 70 percent of Jirau’s power in Ambiente de Contratacao Regulada, Brazil’s regulated electricity market, with the remainder sold in the free market. Power contracts are to be for 30 years.

Jirau would be built 84 kilometers from the Bolivian border at Porto Velho in Rondonia State on the Madeira, an Amazon River tributary. (HNN 2/13/08) The first of its 44 turbine-generators is expected to go on line in 2013.

The decree setting out the auction rules is available on the Ministerio de Minas e Energia Internet site, www.mme.gov.br, under www.mme.gov.br/download.do?attachmentId=13773&download.

The auction announcement, schedule, and documentation is available on ANEEL’s Internet site, www.aneel.gov.br, under links Espaco do Empreendedor, Editas de Geracao, and Leilao 005/2008.

Other data and presentations on Jirau may be obtained from ANEEL’s website at www.aneel.gov.br/complexomadeira.

Consorcio Madeira Energia previously won a concession auction for Jirau’s sister project, 3,150-MW Santo Antonio, also on the Madeira. (HNN 12/10/07) The consortium agreed to sell power from the US$5 billion Santo Antonio for about 78.9 reais (US$44.79) per MWh, a 35 percent discount. The government had expected power to be sold just below 100 reais (US$56.77) per MWh.

Jirau and Santo Antonio 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.

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