UPDATE – Suez-led group wins auction for Brazil’s 3,300-MW Jirau

Consorcio Energia Sustentavel do Brasil (CESB), led by a unit of French utility Suez, won an eight-minute auction May 19 to develop the 3,300-MW Jirau hydroelectric project on Brazil’s Madeira River.

Brazil’s electricity regulator, Agencia Nacional de Energia Eletrica (ANEEL), said CESB defeated one other bidding consortium with 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). (HNN 5/14/08)

Including a price-reducing mechanism for sales of 70 percent of the power to Brazil’s regulated market, Ambiente de Contratacao Regulada, the final price is 71.37 reais (US$43.24) per MWh. That compares to a winning bid of 78.87 reais (US$47.82) per MWh for Jirau’s sister project, 3,150-MW Santo Antonio, in December. (HNN 12/10/07)

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).

The only other bidding consortium was Consorcio Jirau Energia, the same group that won the Santo Antonio auction, 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).

The auction was carried out electronically in a closed environment at ANEEL headquarters in Brasilia. The 70 percent of Jirau’s generation sold to the regulated market will be divided among 39 distribution utilities.

The remaining 30 percent of the generation is to be sold on the free market. In anticipation of the concession auction, Suez auctioned Jirau project power to free market purchasers on May 16 to help set its price bid for the Jirau concession. (HNN 5/7/08)

The winning bidder is to present qualifying documentation by June 9. The concession is to be signed in January with a duration of 30 years.

Jirau is expected to require a total investment of 8.7 billion reais (US$5.27 billion). It is to be built 84 kilometers from the Bolivian border at Porto Velho in Rondonia State on the Madeira, an Amazon River tributary. The first of its 44 turbine-generators is expected to go on line in 2013.

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