Alusa Ferreira Gomes HPP

active

In July 2010, the Brazilian company Alupar, a wholly-owned subsidiary of Alusa Group, was awarded in a competitive bidding process the contract to build and operate a 252 MW hydro power plant located in the Araguari River, state of Amapa. Besides Alupar, three other Brazilian companies took part in the bidding contest: Consorcio Atlantico Norte (Neoenergia, 51%, and state-owned Eletronorte, 49%), Triunfo Participações e Investimentos, and Desenvix. The bidding criteria set by the regulatory agency ANEEL was the lowest tariff. Triunfo presented the lowest offer, a value of US$ 41.5/MWh (BRL 69.78/MWh), 16% below the ceiling set by the regulatory agency. The contract was signed in November 2010, and sponsors created the company Ferreira Gomes Energia S.A. to lead the project during the 35-year contract period. Ferreira Gomes Energia S.A. committed to sell 70% of the output to the regulated market (a 30-year power purchase agreement was signed) and the remaining 30% to the unregulated market. Environmental regulator, Ibama, awarded an environmental license for the project in January 2011. The sponsor committed to invest US$ 466 million (BRL 910 million) in the power plant. As of August 2011, construction works had commenced, but financial closure still had not been achieved. Commercial operations were expected to commence in 2015. 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. Finally, the electricity sold by the company is not subject to sectoral taxes. In June 2011, the sponsor applied for carbon credits. In September 2012, Alupar was granted the authorization to issue bonds (under the coordination of the state-owned bank BNDES) to help finance the project. As of October 2012, construction works were underway. In December 2012, BNDES approved a US$ 241.1 million (BRL 470.6 million) loan to the project. The project company had also issued bonds amounting to US$ 179.3 million (BRL 350 million) in November 2011 and May 2012. In July 2014, the project company issued 13-year 6-month bonds worth US$ 89.3 million (BRL 210 million) arranged by BTG Pactual. Commercial operations commenced in November 2014.