Caetite Wind Farm

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The company Forca Eolica do Brasil was granted authorizations to build a wind park located in the state of Bahia (90 MW in total capacity, municipality of Caetite). Forca Eolica was established as a 50/50 partnership of Iberdrola Renovaveis do Brasil (subsidiary of the Spanish Iberdrola Group) and Neoenergia (39% owned by Iberdrola and 12% owned by state-owned bank Banco do Brasil and 49% by Previ pension fund). The wind park was set to have three power plants named EOL Caetite 1, EOL Caetite 2 and EOL Caetite 3, each with 30 MW in capacity. The 35-year contracts were signed with the regulatory agency ANEEL starting in February 2011. The following special purpose companies were created to manage each plant: Caetite 1 Energia Renovavel S.A., Caetite 2 Energia Renovavel S.A. and Caetite 3 Energia Renovavel S.A. The total investment in the power plants was estimated at US$ 182.3 million (BRL 360 million). EOL Caetite 3 was financed with a loan granted by the state-owned development bank BNDES, which was approved in March 2012 (US$ 32.4 million or BRL 64 million), and the sponsors own resources. In July 2012, EOL Caetite 1 and EOL Caetite 2 also received loans from the BNDES totalling US$ 66.5 million or BRL 129.8 million. The government periodically runs public bidding for the sale of energy to the country´s distribution companies. The two power plants controlled by Forca Eolica won the public bidding that took place in 2010, by offering an average tariff of US$ 70/MWh (BRL 138/MWh). The project companies signed 20-year power purchase agreements with several electricity distribution companies, and the agreements included the annual adjustment of the tariff to the inflation rate. Forca Eolica do Brasil committed to start supplying to the market in 2013. 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. Finally, the electricity sold by the company is not subject to sectoral taxes. In 2011, the company applied for carbon credits. Commercial operations commenced in October 2014.