Belo Monte Hydro Power Plant

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In April 2010, Consorcio Norte Brasil Energia, which was formed by state-owned CHESF (49,98%) and the Brazilian companies Queiroz Galvao (10,02%), Galvao Engenharia S.A. (3,75%), Mendes Junior Trading Engenharia S.A. (3,75%), Serveng-Civilsan S.A. (3,75%), J Malucelli Construtora de Obras S.A. (9.98%), Contern Construcoes e Comercio Ltda. (3,75%), Cetenco Engenharia S.A. (5%) and Grupo Bertin's subsidiary Gaia Energia e Participacoes S.A. (10,02%), was awarded in a competitive bidding process the contract to build and operate a 11.2 GW hydro power plant located in the Xingu River, state of Para. Besides Consorcio Norte Energia, another consortium of companies took part in the bidding contest: Consorcio Belo Monte Energia, which was comprised by companies such as Andrade Gutierrez, Vale S.A., Furnas, Eletrosul, CBA and Neoenergia S.A. The bidding criteria set by the regulatory agency ANEEL was the lowest tariff. Consorcio Norte Energia presented the lowest offer, a value of US$ 44.31/MWh (BRL 78/MWh), 6.02% below the ceiling set by the regulatory agency. The contract was signed in August 2010, and sponsors created the company Norte Energia S.A. to lead the project during the 35-year contract period. The sponsor committed to invest US$ 14.8 billion (BRL 28.9 billion) in the power plant. The sponsors also agreed to pay US$ 10.17 million (BRL 16.6 million) per year to the government, starting when the construction works end. In March 2011, the sponsor was granted a US$ 2.20 billion (BRL 3.6 billion) loan from BNDES. In June 2011, BNDES granted an additional loan of US$ 654 million (BRL 1.1 billion). The remaining cost was set to be financed with a project finance scheme coordinated by BNDES. The project was expected to start operations in 2015. The company signed 30-year power-purchase agreements to sell the electricity to the state-owned electricity distribution company Cemig. As of September 2011, construction works did not commence, and several non-government organizations were pressuring for the project to be cancelled because of environmental concerns. As of October 2012, construction works had commenced (about 20% completed), despite the continuing pressures continued for the project to be cancelled. In December 2012, BNDES approved an additional loan package to Norte Energia: US$ 5028 million (BRL 9815 million) in directed loand and US$ 5533 million (BRL 10800 million)in syndicated loans.