Campos Novos Power Plant

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In October 1999, Agencia Nacional de Energia Electrica (ANEEL –Brazil’s energy regulatory agency) awarded a 35 year contract to build and operate an 880MW hydroelectric project on the Canoas River in the State of Santa Catarina to the consortium Campos Novos Energia (Enercan). The Campos Novos Power Plant project consisted of three 293MW turbines, a 201m high rock filled dam with a 590m crest and an 11 km transmission line to be connected to the existing 230kV Campos Novos Substation. The wining consortium was originally composed by CPFL Geracao de Energia, Companhia Paranaense de Energia (COPEL), Companhia Estadual de Energia Eeletrica (CEEE) and Centrais Eletricas de Santa Catarina (CELESC). In 2003, COPEL sold its stake in Enercan to Companhia Brasileira de Aluminio (CBA, subsidiary of Votorantim). COPEL received US$5.9 million in November 2003 and US$24.5 million in February 2004. As of 2005, Enercan was composed by CPFL Geracao (48.72%), CEEE (6.51%), CELESC (2.04%), CBA (22.69%) and Companhia Niquel Tocantins (CNT, also part of Votorantim) – 20.04%. The project cost was estimated at US$523.9 (1,276.7 million real). The project reached financial closure on January 25 2005. The project is being financed by a 15 year (12 years with a 26-month grace period) US$75 million A loan from the IADB and a US$267.5 million loan with the same maturity from BNDES. The project began construction in June 2001 and was expected to begin operations in February 2006 with the first turbine. Protest by local residents and rising costs for compensation payments to displaced communities in 2005 were not expected to delay the project, though they did impact the cost estimate, increasing it from the US$523.9 million original estimate. The company offered the winning bid of US$ 9.7 million (R$ 22.6 million) in the auction carried out by ANEEL. The amount was to be paid in annual installments until the end the concession period. The contract includes 12 year power purchase agreements with the project sponsors for the following amounts: CPFL Distribuicao, 119MW; CPFL Piratininga, 63MW; CBA, 85MW and CNT 75MW. In May 2007, the Campos Novos Power Plant became fully operational.