BEN Alagoas Biomass Plant

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The company BEN - Bioenergia, Geracao e Comercializacao de Energia do Nordeste Ltda, a subsidiary of the Brazilian company Brasilterm Energia (Grupo Bolognesi), was granted the authorization to build and operate a sugar-cane-residue fueled power plant located in the state of Alagoas. Initially, the power plant was set to be run using grass residue as fuel, to have a capacity of 30 MW and to be established in the state of Piaui; however, due to technical difficulties, the fuel and location were changed, as well as capacity, which was increased to 53 MW. The 35-year contract was signed with the regulatory agency ANEEL in February 2009. The total investment committed to the project was estimated at US$ 79.8 million (BRL 157.7 million). The electricity produced was set to be sold under power purchase agreements with electricity distribution companies established in August 2008. Commercial operations were set to begin in 2010, but construction works commenced in late 2011. ANEEL approved the changes in the commercial operation scheduled date, and operations were set to commence in 2013. As of October 2012, construction works were underway. The EPC contract was signed with the company Areva Koblitz. 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 accelated depreciation methods of accounting for construction expenditures. Operations commenced in April 2013.