Cachoeira Caldeirao Hydro Power Plant

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In December 2012, the company EDP Brasil S/A , was awarded in a competitive bidding process the contract to build and operate a 219 MW hydro power plant located in the Araguari River, state of Amapa. The names of other bidders were not disclosed. The bidding criteria set by the regulatory agency ANEEL was the lowest tariff. EDP Brasil S/A presented the lowest offer, a value of US$ 48.83/MWh (BRL 95.31/MWh), 5.63%% below the ceiling set by the regulatory agency. The contract was signed in May 2013, and sponsors created the company Empresa de Energia Cachoeira Caldeirao S/A to lead the project during the 35-year contract period. Empresa de Energia Cachoeira Caldeirao committed to sell 100% of the output to the regulated market . Environmental regulator, Ibama, awarded an environmental license for the project in August 2013. The company Cesbe S/A engenharia e Empreendimentos was hired to conduct the EPC works for the project and supply equipment. The sponsor committed to invest US$ 468 million (BRL 1.1 billion) in the power plant. Financial closure was achieved in October 2014, when the sponsor was granted a US$ 214.5 million (BRL 504.1 million) loan from BNDES. The remaining cost was set to be financed with the sponsors’ internal resources and the chinese group China Three Gorges Corporation, which acquired 50% of the project company's shares. Construction works commenced August 2013, and operations were expected to begin by 2017. In January 2015, BNDES granted na additional US$ 53.9 million (BRL 160.3 million) loan to the Project. 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.