Alupar Small Hydro Power Plants

active

The Brazilian company Alupar Investimentos (Grupo Alusa) was granted an authorization to build two small hydro power plants located in the state of Goias (municipalities of Santa Helena de Goias, Acreuna and Tuverlandia). The following special purpose companies were established to manage the projects: * Agua Limpa Energia S.A. - PCH Antonio Dias (23 MW, fomerly known as PCH Agua Limpa) * Verde 08 Energia S.A. - PCH Verde 08 (28.5 MW) In October 2012, the company signed 30-year contracts with the regulatory agency ANEEL allowing the company to build and operate the power plants. In December 2013, PCH Antonio Dias took part in a bidding process to establish 30-year power purchase agreements with electricity distribution companies; the company won the contracts by offering the tariff of US$ 46.4/MWh (BRL 138 /MWh). PCH Antoino Dias committed to commence operations in 2018. In August 2013, PCH Verde 08 also won power purchase agreements to sell electricity to distribution companies. The company offered the tariff of US$ 43.7/MWh (BRL 130 /MWh). PCH Verde 08 also committed to commence operations in 2018. Alupar estimated the investment in each power plant as follows: * PCH Antonio Dias - US$ 47.8 million (BRL 142.4 million) * PCH Verde 08 - US$ 68.8 million (BRL 204.8 million) In April 2015, the company issued bonds in the value of US$ 84 million (BRL 250 million) to help finance both power plants and two transmission lines. The funding was set to cover 31.7% of PCH Verde 08 costs and 20% of PCH Antonio Dias costs. The 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.