AC Transmissao

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The Brazilian government, under the power regulator Aneel, awarded a greenfield build, own, and operate contract for a transmission line in Brazil’s North-Eastern Piaui state to the neighboring Ceara state. The project company, Consorcio AC Transmissao, will transmit power through the concessional period of 30 years. The 500 KV and 545 KM line will connect the two states and their generating plants at Teresina II and Fortaleza II. The project also includes the construction of three substations. The AC transmissao project was one of 7 transmission concessions awarded by Aneel in 2003-2004; all lines cover 1,787 km and will include investments of US$614 million. Aneel was prompted to release the bids after Brazil’s National Privatization Council (CND) issued a resolution in June 2003 calling for 7 groups of transmission concessions. The greenfield build, own, and operate contract was awarded by Aneel in late 2003 and signed the concessional agreement in February 2004. The contract was signed by the winning consortium comprising state-owned Companhia Hidro Electrica do Sao Francisco (Chesf – 49 percent) and Alusa (51 percent). The consortium was selected on the basis of offering the lowest transmission tariff. Total project financing of the US$190 million project was provided by the sponsor in October 2004 with the support of regional development bank BNB. The bank provided 300 million real financing for the project. The AC Transmissao project started operations in January 2006.