Eletrobras set for 'major changes' - minister

Wednesday, December 31, 2014

Brazil's new energy minister Eduardo Braga has vowed to prioritize greater transparency at state-run energy firms Petrobras and Eletrobras during his stewardship.

Braga will officially replace Edison Lobão on Thursday as part of a 13-member cabinet reshuffle announced by President Dilma Rousseff.

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Among his concerns will be an ongoing corruption probe into oil giant Petrobras and an electric power crisis caused by drought-parched hydroelectric dams.

"Petrobras will undergo major changes that will strengthen its administrative capacity and promote meritocracy," Braga said in an interview published by the Globo newspaper.

"Political influence in itself is not harmful but it is increasingly clear that we need more open dialogue to give the market confidence. The same goes for Eletrobras."

Brazil's worst drought in decades has left the country reliant on backup thermoelectric plants, prompting the wholesale cost of energy to soar.

Lobão last week admitted distributors would be forced to pass on higher costs to consumers.

According to Braga, Brazil must lessen its reliance on hydropower, which comprises more than 60% of the country's installed capacity.

"Our system is very robust and reliable, but of course it's not perfect," Braga said. "Hydropower has a significant share of the energy matrix and, in cases of severe droughts, that becomes a problem.