Brenco Companhia Brasileira de Energia Renovavel

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The Brazilian company Brenco Companhia Brasileira de Energia Renovavel was granted authorizations by the regulatory agency ANEEL to build seven thermal power plants located in the states of Mato Grosso (municipality of Alto Taquari), Mato Grosso do Sul (municipalities of Costa Rica and Paranaiba) and Goias (municipalities of Mineiros and Perolândia). The cogeneration power plants were set to use sugar cane residues as fuel, as the company main line of business is the pressing of sugar-cane and the production of ethanol. Brenco was set up as a partnership of several international investors, but the state-owned bank BNDES held 20% of the company shares. The 35-year contracts were signed with the regulatory agency ANEEL in February and June 2009, allowing the power plants to operate in the electricity market as an independent producer. These authorizations granted the sponsor with the right to sell electricity in the Brazilian wholesale market. In August 2008, the state-owned bank BNDES approved a US$ 655.7 million (BRL 1.2 billion) loan to finance the construction of the industrial units in Alto Taquari, Costa Rica e Mineiros. The total investment on the sugarcane processing units and energy cogeneration plants amounts to US$ 983.6 million (BRL 1.8 billion). The investment values for the cogeneration units were not available. As of December 2009, only the power plants located in Alto Taquari and Mineiros (named Morro Vermelho) were under construction, each with capacity of 72.7 MW. Both units took part in a competitive bidding process to sell electricity to the regulated wholesale market in 2008 (15-year power purchase agreements were signed guaranteeing the sale of electricity to the national grid). In the second half of 2009, the company showed signs of financial difficulties and announced delays in its projects. Merger talks were underway with the Brazilian company ETH, a subsidiary of Odebrecht. In early 2010, Brenco was incorporated by ETH. Commercial operations on the Costa Rica unit commenced in November 2011.