Brazil’s Eletrobras to invest over US$6bn in 2020-24

Brazil's state power holding company Eletrobras approved a plan to invest 32.4bn reais (US$6.25bn) in 2020-24.  

The lion's share of the capex will go to the construction of the Angra 3 nuclear plant in Rio de Janeiro state, with 13.9bn reais. The company is due to hold a process to attract a private partner for the project, which is expected to come online by November 2026.   

Another 9.4bn reais are earmarked for the transmission sector and 7.3bn reais for generation projects. The company also plans to invest 1.8bn reais in infrastructure and environmental activities, with an increased focus on digitization.   

“Sustainable development is now one of Eletrobras’ purposes. We want to be an innovative firm providing clean energy,” CEO Wilson Ferreira Júnior said during a conference call on Monday.   

Eletrobras’ privatization is among economy minister Paulo Guedes' top priorities. However, Ferreira Júnior said the process could take longer due to the coronavirus pandemic.    

“We understand this will be further ahead. Meanwhile, we'll continue focusing on the firm’s simplification and on reducing the number of specific purpose subsidiaries,” he said.   

Eletrobras is seeing other effects of the pandemic, such as postponements or delays in construction works as a result of mobility issues. The firm is also receiving requests for the revision of free power market contracts, which are closed with final consumers. Those agreements represent 37% of Eletrobras' revenues from power sales contracts.    

“Those requests exist, but we still haven't concluded any revision. The contracts are long and have flexibility and I doubt that it's in anyone's best interest to break them due to a specific situation, so I believe there will be a balance in those negotiations,” the CEO said.   

According to Ferreira Júnior, the energy ministry should announce soon measures to help Brazil’s energy market get through the crisis, including actions to combat a fall in liquidity and a possible extraordinary review of tariffs.   

For 2019, Eletrobras posted a 10.7bn-real net profit, down 20%. Revenues totaled 33.7bn reais, up 9% compared with 2018. By year-end, installed capacity amounted to 51.1GW, a 3% increase, impacted mainly by the start of operations of the Belo Monte hydro plant.