Candonga Hydro Power Plant

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In February 2000, the Brazilian company Consorcio Candonga was awarded in a competitive bidding process organized by the federal regulatory agency Aneel the 35-year contract to build and operate a 140-MW hydro power plant located in the Doce River, state of Santa Catarina. Consorcio Candonga was established as a partnership of Vale(50%) and Alcan Aluminio/Novelis, a subsidiary of the Indian group Aditya Birla(50%). Information on the other bidders was not available. The bidding criteria set by the federal regulatory agency ANEEL was the highest payment to the government for the concession rights. The company agreed to pay US$ 0.062 million (BRL 0.181 million) in yearly installments during the life of the contract, starting once operations commence (using a discount rate of 10%, the present value of this contribution was estimated at US$ 69 million). The contract was signed in April 2000, and sponsor created the company Consorcio Candonga to lead the project during the 35-year contract period. The sponsor committed to invest US$ 50 million in the power plant. Construction works were undertaken by Construtora OAS, Vatech, and Geoprojetos Engenharia Ltda. Construction works started in June 2001, and operations commenced by September 2004.