October 20, 2021
The Brazilian government’s plans to privatize its electricity company Eletrobras have received important approval. Its subsidiary Eletronuclear will remain under government control and will have more opportunities to raise funds and sign contracts to complete the third reactor at the Angra Nuclear Power Plant.
Brazilian Minister of Economic Affairs Paulo Guedes (center) and Minister for Mining and Energy Bento Costa Lima (right) at the CPPI meeting (Image: Washington Costa / ASCOM / ME)
“Although Eletrobras is the largest energy company in Brazil, it is currently not participating in auctions for new projects due to a lack of resources,” said the Program Council for Investment Partnerships (Conselho do Programa de Parcerias de Investimentos, CPPI) created for the expansion. and accelerate public-private partnerships in the country. The members of the CPPI include the Brazilian President Jair Bolsonaro, several ministers and the heads of strategic economic bodies.
Enabling Eletrobras to raise new funds from private investors and invest in new infrastructure will “pave the way for the development of the Brazilian energy sector, create an attractive environment for investors, stimulate the revitalization of water resources and a structural reduction in energy production costs” . “Said the CPPI. This would make a marked difference to the last five years, in which the Brazilian state had to pump 4.8 billion BRL (858 million US dollars) into Eletrobras, it said.
The government plans to restructure Eletrobras so that it can issue new shares for purchase by private investors. Controls will be put in place to prevent a shareholder from having more than a 10% say in decisions, and the Brazilian state will keep a “golden share” that gives them a veto.
The CPPI approved this yesterday based on advice from the Brazilian Development Bank.
It is important that the new agreement respects the constitutional requirements in order to keep the nuclear subsidiary Eletronuclear under state control. The same applies to the Itaipu Binacional company, which manages the Itaipu Dam on the Paraná River on the border between Brazil and Paraguay.
Bach 3
For Angra 3, the changes should “finally enable construction to be completed,” announced the CPPI. “These laws and contracts will not only ensure the good governance of Eletronuclear, but also enable public investments in the Angra 3 project not to be lost, but to benefit Brazilian society,” it said.
Two major contracts to complete Angra 3 were announced in July. A consortium led by Tractebel was selected to structure the completion of Angra 3 and a Brazilian consortium of Ferreira Guedes, Matricial and ADtranz was selected to carry out the construction work. In September, Eletronuclear signed a Memorandum of Understanding with Russia’s Rosatom to develop cooperation in many areas of the operation and maintenance of nuclear power plants, including new construction.
The CPPI concluded a statement on the grounds that “Brazil needs a strong, efficient and competitive Eletrobras that is able to handle the investments required to meet its growing electricity consumption. In this sense, capitalization is essential for a bright future.” , not only for companies, but also for the electricity sector as a whole. To fulfill this mission, Eletrobras needs considerable resources that the federal government does not have. Creating an attractive environment for investors increases the competitiveness of the sector, which in turn increases the prices for lower the population. “
Researched and written by World Nuclear News
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