Why Eletrobras is set to integrate Furnas' operations
Brazilian energy giant Eletrobras has begun preliminary studies to assess the possibility of integrating its operations with those of its wholly-owned subsidiary Furnas.
The company said in a statement that the move is part of a strategic planning initiative to simplify its corporate structure and governance.
Furnas generates energy from hydroelectric, natural gas-fired, wind and solar sources. Its system includes 22 hydro plants, two thermoelectric plants, one complex with five wind farms, and 35,201km of transmission lines and 72 substations.
João Abdouni, an analyst at Levante Corp, said Eletrobras has significantly reduced its corporate structure and operating costs, having decreased the number of special purpose companies from 178 to 73 in the last seven years, with the goal of reaching 31 by 2024.
He believes that Eletrobras could do the same with other subsidiaries.
"Chesf, for example, has all its shares held by Eletrobras, and it’s possible that the company will adopt a stance of reducing the corporate structure, just as it is doing with Furnas," Abdouni told BNamericas.
The other subsidiaries are CGT Eletrosul, Eletronorte and Eletropar.
In order to make the privatization of Eletrobras feasible, a corporate restructuring was implemented in June last year that segregated the company's stake in Itaipu Binacional and transferred control over Eletronuclear to state-owned ENBPar, so that the two would remain with the government as required by law.
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