Canaa Geracao Small Hydro Power Plants

active

The Brazilian company Canaa Geracao de Energia S.A., a subsidiary of Electra Power (99%) and Design Head Engenharia (1%), was granted authorizations to build three small hydro power plant located in the state of Rondonia (54 MW in total capacity). The 30-year contract was signed with the regulatory agency ANEEL in June 2006, and the power plants were named: PCH Canaa - 17 MW PCH Jamari - 20 MW PCH Santa Cruz de Monte Negro - 17 MW Canaa Geracao committed to invest US$ 127.4 million (BRL 300 million) in the construction of the Santa Cruz de Monte Negro, Jamari and Canaa power plants. Construction works at the PCH Santa Cruz were concluded in April 2014, and the other two power plants were expected to be concluded until the end of the same year. In July 2010, all three power plants had taken part in the same competitive bidding process to sell electricity to the regulated wholesale market starting in 2013 (30-year power purchase agreement was signed guaranteeing the sale of electricity to the national grid). The average tariff offered in the bidding process by the power plants was US$ 78/MWh (BRL 154/MWh). 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.