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Bids in for Brazil’s hydro concessions

BRAZIL’S TENDER INVITING developers to build and operate eight hydro power plants in five of Brazil’s states has evoked keen interest. At the time of the auction on 13 July 2002, thirty two companies had prequalified and drawn documents from ANEEL, Brazil’s federal agency for energy regulation.

The winners of the concessions plan to invest approximately US$1.12B by 2008 to build the hydro plants with a total capacity of 1584MW. The concessions to run the plants are for 35 years.

Among the winners were mining giants Alcoa and Australia’s BHP Billiton Vale do Rio Doce, who are investing in their own power generation in Brazil on concerns that energy costs may rise as Brazil plans to end controls on electricity prices in the future.

A group formed by the Alcoa Aluminio unit of Alcoa, BHP Billiton Group, Brazil’s Vale and Belgium’s Tractebel won the concession to build and run the largest hydroelectric power plant. The companies, which together will spend US$1B to build the plant, agreed to pay US$1.4M a year to the government during the 35-year concession for a 1087MW plant between the states of Tocantins and Maranhao.

Alcan also agreed to pay about US$1.6M a year for a second concession to build and run a 60MW plant in the southeastern state of Minas Gerais. Brazil’s Triunfo Participacoes won two concessions to build and run a 108MW power plant and a 93MW plant, both in the state of Goias. The company, which plans to invest US$120M to build the plants, will pay the minimum price set by the government for both concessions.

Brazilian construction companies Empreendimentos Master and J Malucelli Construtura de Obras also won concessions to build a 48MW plant in Mato Grosso do Sul state and a 33MW plant in Goias, respectively.