China’s State Grid won the largest electricity transmission lot ever auctioned in Brazil, involving a complex project that will require investments of around BRL 18 billion (USD 3.6 billion).
In total, the auction held by electric power watchdog Aneel on December 15 contracted the construction of 4,471km of lines and substations with a conversion capacity of around 9,840MVA, in the states of Goiás, Maranhão, Minas Gerais, São Paulo and Tocantins, with planned capex of BRL 21.7 billion (USD 4.4 billion).
State Grid Brazil Holding won lot 1, proposing a permitted annual revenue (RAP) of 1.9 billion reais, representing a discount of 39.9% in relation to the ceiling price set by Aneel. RAP is the revenue to which the investor will be entitled for the provision of the transmission service once the facilities start commercial operation.
China State Grid Brazilian Subsidiary Wins USD 525 million Privatisation
Lot 1 consists of 2,981km of transmission lines in the states of Maranhão, Tocantins and Goiás, as well as the construction of the 800kV Graça Aranha and Silvânia converter substations.
The aim of the works is to increase the capacity of the interconnection between the northeast and central-west for the flow of surplus energy from the northeast.
The lot draws attention because it is the largest ever announced by Aneel in terms of estimated investment, which exceeds the estimated investment for 54 of the 55 auctions held in 26 years.
China Open to Explore Investments in New Energy, Digital Economy and 5G in Brazil
Some 30,220 direct jobs will be created, and the project is due to be completed in 72 months.
Made up of Alupar Investimentos and Mercury Investimentos, the Olympus XVI consortium won lot 2, offering 240mn reais, a discount of 47%.
With an estimated investment of 2.6bn reais, lot 2 requires the construction of the 500kV, 660km Silvânia-Nova Ponte 3 transmission line and the 500kV, 442km Nova Ponte 3-Ribeirão Preto transmission line.
The facilities will contribute to the expansion of regional interconnections and the export capacity of the north and northeast.
Closing the auction, Celeos Redes beat Eletronorte (Eletrobras) and won lot 3, with a RAP of 101mn reais, a discount of 42.4%.
