World : Brazil power auctions to attract utilities, funds, Asian companies

SAO PAULO/BRASÍLIA, Dec 14 (Reuters) - The Brazilian power sector is set to receive a boost in coming days from a varied, yet solid, set of investors including local and foreign utilities, private equity firms and Asian conglomerates, officials and market participants said on Thursday.

Brazil will hold four rounds of auctions to award licenses for new projects in the energy sector over the next days, starting Friday, when bidders will compete for rights to build almost 5,000 kilometers (3,000 miles) of power transmission lines demanding 9 billion reais ($2.70 billion) in investments.

"We went through a consolidation in the last two years. Some more leveraged companies gave up on projects, others were acquired. We will see a more mature profile of investors next week," said Elbia Gannoum, head of Brazil's wind power association, ABEEólica.

She said utilities such as Enel SpA, Engie SA, AES Corp and CPFL Energia SA will have an active role in the generation auctions, along with investment funds such as Atlantic Energias Renováveis, Omega and Pátria Investimentos.

Gannoum estimates the rounds will award licenses for around three gigawatts of new generation capacity from all sources, demanding more than 10 billion reais in investments.

It could be more than that if there were not uncertainties about Brazil's economic recovery that may lead to investor caution.

In Friday's power transmission auction the signals point to another profile of investors.

Asian companies are expected to be key bidders, continuing a trend initiated by China'sState Grid Corp and India'sSterlite Power Grid.

Both companies, which have been previously awarded licenses for large lines, said they plan to take part in the next round.

China and India are large producers of power transmission equipment and see the Brazilian projects as an opportunity to open markets for their products.

Anderson Márcio de Oliveira, who overseas energy projects for Brazil's Investment Partnerships Program, said on Thursday that the government expects to see bidders for all the 11 lots of lines to be auctioned off.

"Those are projects that offer a fixed return rate with basically zero regulatory risk," he said.


Source :

Smart Grid Bulletin July 2019

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