Brazilian government signs concession to 29 hydroelectric dams

The Ministry for Mines and Energy signed Tuesday (Jan. 5) new concession contracts to 29 hydroelectric dams sold last year. The dams have a total capacity of 6000 megawatts of power and will generate a revenue of $4.24 billion, of which $2.74 billion had been paid at the moment of signing contracts. The remainder will be paid in 180 days and concessions will last 30 years.

The Chinese company China Three Gorges obtained—for $3.44 billion—the concession to Jupiá and Ilha Solteira dams, at the river Paraná, and will be the first foreign company to alone take over the management of a hydroelectric dam in Brazil. The company already manages the Three Gorges hydroelectric dam in China, considered the one with greatest capacity for energy generation in the world.

China Three Gorges CEO Lu Chun said the contract signing has been a major event of cooperation between two countries with great relevance in the production of hydropower. According to him, the dam has Brazilian equipment and the Brazilian Social Development Bank (BNDES) participates in it.

"We acknowledge the importance of Jupiá and Ilha Solteira for the electric power in Brazil. We will comply with all the terms of the contract and work with responsibility to give back to society," declared Chun.

Besides the two dams granted to the Three Gorges in the auction, concessions to the dams of Mourão I and Paranapanema, in Paraná, have been granted to the Italian company Eneel Green Power. Concessions for other 25 dams have been granted to several Brazilian companies already responsible for their operation.

The CEMIG company will continue to operate 18 dams in Minas Gerais. The CELESC company will continue with the concession of five dams in the state of Santa Catarina, the concession to Capivari dam, in Paraná, has been granted to Companhia Paranaense de Energia, and Companhia Energética de Goiás obtained the concession to Rochedo dam again.

"This auction had a special meaning for the Brazilian electricity sector, not only due to the amount of energy [being auctioned] but for being the first time in the sector in which there were signing bonuses, which produced a revenue of $4.24 billion, an amount of great importance due to its contribution to the Brazilian fiscal adjustment," said Luiz Eduardo Barata, acting minister for Mines and Energy.

Translated by Amarílis Anchieta