Fiat pre-selected for Celesc hydro projects

Fiat Engineering, the engineering arm of the Italian vehicle maker, is one of three firms selected by an investment fund to build up to 10 small-scale hydroelectric generation projects in southern Brazil with total contracts worth US$75mn, a source close to negotiations confirmed press reports. This is the first stage of a program sponsored by Brazilian special purpose company Tetrahedron and Santa Catarina state power company Celesc to finance the construction of several small-scale hydro projects with total installed capacity of 200MW. The program was created in February and Celesc agreed to buy all of the power produced. Fiat is one of three engineering firms that are being selected, the source told BNamericas. Construction should start in first quarter of 2005 and commercial operations are expected to begin 18 to 24 months after that. Total investment is seen at US$150mn. This project is separate from the federal government's alternative energy source incentive program Proinfa that plans to contract out the construction of 1,100MW of installed capacity from small-scale hydroelectric dams. Celesc will pay 5.8% less than the 117 reais (US$39.89) per MWh offered under Proinfa, the source said.