Brazil's Eletronuclear suspends US$4bn Angra 3 project

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Wednesday, September 30, 2015

The nuclear unit of Brazil's state-run electric utility Eletrobras has suspended construction work on its US$4bn Angra 3 power plant pending an internal probe into alleged corruption.

Newly appointed Eletronuclear CEO Pedro José Diniz de Figueiredo said all building contracts for the project had been frozen for 90 days.

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Eletronuclear has hired law firm Hogan Lovells to conduct an audit of Angra 3, which is also the subject of a criminal investigation by federal police as part of their Lava Jato or Car Wash probe.

"We have suspended the contracts to allow us to have an overall view of the whole situation, to verify all of the conditions," Figueiredo was quoted as telling Globo newspaper.

"We can't continue without re-evaluating all of the contracts and financial sources given all of the doubts that have arisen as a result of Lava Jato."

Figueiredo was named Eletronuclear's CEO on Tuesday, having filled the role on an interim basis since early August.

He replaced Othon Luiz Pinheiro da Silva, who has been indicted for allegedly siphoning off 4.5mn reais (US$1.2mn) from Angra 3 contracts.

Originally earmarked to begin operating in 2016 at a cost of 10bn reais, Angra 3 has had its opening postponed to 2019. The 1.405GW project's latest cost estimate is 16bn reais.

In July, Lava Jato investigators shifted their focus from national oil firm Petrobras to other state-run utilities.

Police have arrested four former Petrobras directors, dozens of construction firm executives and politicians from Brazil's ruling Workers' Party since launching the probe in March 2014.

The scandal has coincided with a deepening economic crisis in Brazil, impacting the popularity of President Dilma Rousseff. Recent opinion polls have put Rousseff's approval rating at below 10% amid opposition calls for her impeachment.