Apertadinho Small Hydro Power Plant

distressed

The Brazilian company Centrais Eletricas Belem S.A. (CEBEL), a wholly-owned subsidiay of Companhia Energética Serra da Carioca S.A., was granted an authorization by the regulatory agency ANEEL to build and operate a 30-MW small hydro power plant located in the Comemoracao River, state of Rondonia (in the municipalities of Vilhena). The 30-year contract was signed with the regulatory agency ANEEL in May 2002. CEBEL S.A. committed to invest US$ 74.3 million (BRL 162 million) in the construction of PCH Apertadinho. Financial closure for the project was reached in 2006, when the company was granted a US$ 68.8 million (BRL 150 million) syndicated loan by three pension funds from the employees of utility companies (Petros from Petrobras, Celos from Celesc and Prece from Cedae). Construction works on this power plant started in 2007, and the unit would become operational in 2008, but days before the inauguration, the dam did not resist. The company had to pay about US$ 30 million (BRL 60 million) in environmental damages costs, and sued the consortium responsible for the EPC contract (Schahin Engenharia e EIT - Empresa Industrial e Tecnica). By the time the accident happened, the insurance policy had expired. The company began to rebuild the power plant, and as of August 2010 the project was still under construction. As of February 2012, construction works were still underway and due to the delays the regulatory agency ANEEL refused to grant the project company with subsidies it once had right to use to finance the project. PCH Apertadinho signed a power purchase agreement with the state-owned company Eletrobras for 20 years through the Brazilian Federal program PROINFA (incentive program for alternative power generating companies).