Chinese firm wins Brazil power line tender
China's State Grid emerged as the winner in Brazil's largest-ever electricity transmission line auction on Friday, snapping up the largest batch of projects up for grabs.
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Brazil, Sao Paulo: China’s State Grid emerged as the winner in Brazil’s largest-ever electricity transmission line auction on Friday, snapping up the largest batch of projects up for grabs.
State Grid won a bid to build and operate 1500 km of lines, followed by a consortium led by Alupar to build 1100 km of power lines. The auction is the second of a series of tenders planned by the government to increase the electricity transmitted from renewable sources generated in the northeast of the country to demand from southern sources. The northeast boasts both abundant sunshine and wind.
State Grid offered a discount of nearly 40% on the first lot’s maximum annual revenue to build and operate 1500 km of lines. The winning bids for each lot were determined by the largest discount offered on the annual revenue, paid once facilities start operations. The tender was held at Sao Paulo’s stock exchange building and saw little competition. Eletrobras, Brazil’s largest transmission line operator, did not submit any winning bids.
State Grid already held 24 transmission concessions, 19 by itself and five in joint ventures, and overall operates more than 16,000 km of power lines in Brazil.
Other winners included consortium Olympus XVI, comprised of transmission firm Alupar (ALUP11.SA) and investment fund Mercury, which was awarded the second lot auctioned with an offered discount of 47%. This lot covers 1100 km of lines in Goias, Minas Gerais and Sao Paulo states and will require a 2.6 billion reais investment. Celeo Redes won the third and smallest lot covering 388 km in Minas Gerais by offering a 42.4% discount, with an estimated investment of 1 billion reais. All projects should start five to six years after the 30-year contracts are signed.
Source: Reuters