Adecoagro Invinhema Thermal Power Plants

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The Brazilian company Adecoagro Invinhema Ltda, a subsidiary of the Argentine group Adecoagro, was granted authorizations to build and operate two sugar-cane-residue fueled power plants located in the state of Mato Grosso do Sul. The 30-year contracts was signed with the regulatory agency ANEEL over the years starting in June 2009. The power plants were named UTE Angelica (96 MW) and UTE Amandina (40 MW). The value of the investment committed to the Angelica was estimated at US$ 255.7 million (BRL 450 million). The investment figure of the Amandina was not available (the company was set to invest BRL 600 million in both a sugar cane processing unit and the power plant, but, as of October 2012, the construction works had not commenced). Commercial operations commenced in June 2014. The government periodically runs public bidding for the sale of energy to the country´s distribution companies. The UTE Angelica won the public bidding that took place in 2010, by offering an average tariff of US$ 75.6/MWh (BRL 154.25/MWh). The project company signed 15-year power purchase agreements with the several electricity distribution companies. UTE Angelica committed to start supplying to the market in 2011, but the unit commenced commercial operations in September 2010. The project company was granted the right to take part in the government program called Regime Especial de Incentivos para o Desenvolvimento da Infra-Estrutura (Reidi). Companies selected to take part in this program were given tax cuts in the acquisition of capital equipment and construction material acquired both in the domestic and international markets (this incentive represented a cost reduction of about 9.25%). In addition, the company was allowed to use accelerated depreciation methods of accounting for construction expenditures. In 2006, the UTE Angelica applied for carbon credits.