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Brazil creates state-owned company to operate 14-GW Itaipu hydro, nuclear plants

Brazil creates state-owned company to operate 14-GW Itaipu hydro, nuclear plants

The Brazilian government has created a new public company that will manage the 14-GW Itaipu hydro plant, which Brazil shared with Paraguay, as well as nuclear plants and other assets currently operated by state-owned electricity giant Eletrobras, which is in the process of privatization.

According to BNamericas, the measure establishes the Brazilian Nuclear and Binational Energy Holding Company (ENBpar), which will be linked to the Ministry of Mines and Energy, per the decree published in the Official Gazette of the Union.

The creation of this new company was foreseen within the project approved by Congress and sanctioned by President Jair Bolsonaro to make viable the privatization of Eletrobras, the largest company in the electricity sector in Latin America.

The government intends to put Eletrobras in the hands of private initiative by issuing new shares without state participation, a process it expects to conclude in the first quarter of 2022. In this context, it is estimated that public participation in the company will be reduced from the current 60% to around 45%, although the state will retain a “golden share,” which will give it veto power in strategic decisions.

ENBpar is considered a fundamental step toward the sale of Eletrobras, as it will take over some of the assets currently operated by the state-owned group that will not be privatized, so they will continue to be controlled by the Brazilian state. Among them are the operation of nuclear power plants, today under the umbrella of Eletronuclear, a subsidiary of Eletrobras, and the ownership of the capital stock and the acquisition of the electricity services of the Itaipu Binacional hydroelectric power plant, under the treaty signed with Paraguay for joint management of the dam.

The new state-owned company will also manage the National Electric Energy Conservation Program (Procel) and the contracts for the commercialization of energy generated under the Incentive Program for Alternative Sources of Electric Energy (Proinfa), among other initiatives.

Eletrobras is responsible for about 30% of the energy generated by Brazil and 45% of the transmission, with a combined extension of more than 70,000 km of power lines.