Brazil power transmission auction draws US$660mn in capex

Brazil’s latest power transmission tender drew an estimated 3.51bn reais (US$660mn) in capex for the construction of 710km of lines and 3,650MVA in substation transformer capacity, in addition to maintenance services on 743km of lines and 2,200MW in substations

Held Friday by regulator Aneel, the auction saw an average discount of 38.19% on the 604mn-real annual allowed revenue (RAP) ceiling, representing savings of approximately 5.8bn reais for energy consumers. 

Nelly Colnaghi, an analyst at Levante Ideias de Investimentos, highlighted that the sharp discount, was expected following the trend observed in recent biddings. 

“Despite a deterioration of the economic scenario, which implies higher capex and consequent limitation of the discount to be offered, the transmission segment is still strategic, which explains the important competition observed, with bids for all six lots,” she told BNamericas. 

Colnaghi said the transmission area is currently a bottleneck in the country's electricity sector, since, with the significant increase in the supply of energy, large groups are looking for assets to transport the additional power. 

Cemig Geração e Trasmissão was the winner of lot 1, comprising assets in Minas Gerais and Espírito Santo states. 

EDP-Energias do Brasil took lot 2, in Rondônia, while Transmissora Aliança de Energia (Taesa) won lots 3 and 5, in Maranhão/Pará and Rio Grande do Sul/Santa Catarina, respectively.

"We won a strategic lot for EDP Brasil, since it is practically a continuation of EDP Transmissão Norte, a project we won in 2021," the company's president, João Marques da Cruz, said in a statement. 

"Let's focus now on 2023, which will certainly have opportunities for strong synergies with the growth strategy of EDP in Brazil in the distribution, transmission and solar areas."

Usina Termelétrica Norte Fluminense won lot 4, in Rio de Janeiro; and the Olympus XIV consortium (Alupar and Perfin) took lot 6, in São Paulo. 

The winning projects, which are detailed in Portuguese here, have completion periods ranging from 42 to 60 months. 

Aneel is expected to approve the auction results on February 21, and the date set for signing the concession contracts is March 30.