Brazilian government announces terms of upcoming hydroelectric power auction

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Signature bonuses signed by power generators in an upcoming hydroelectric power auction will net the Brazilian government about US$4 billion, according to terms of a resolution published this week in Brazil's official gazette.

The technical and economic parameters, established by Brazil's National Energy Policy Council (CNPE), stipulate that winning bidders must pay 65% of the payment in cash at the time of the contract's signing, with the remaining 35% to be paid within 180 days.

CNPE's rules also say that between 100% of energy produced by the plants must go to Brazil's regulated market for the entirety of 2016. Beginning Jan. 1, 2017, operators must only guarantee 70% of the plants' output, with the remainder free for sale.

The power auction, to be held by power regulator Agencia Nacional de Energia Eletricqa (Aneel) on October 30, offers 30-year concessions for plants located in states Sao Paulo, Minas Gerais, Goias, Parana and Santa Catarina. The plants have a cumulative output capacity of about 6 GW.

Some of the projects being offered are those surrendered by previous operators following a set of sweeping energy tax reforms that were introduced to Brazilian utilities in December 2012.

For more from Brazil, visit here.

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