Cataventos Paracuru I Wind Power Plant

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The company Tecneira Acarau Geracao e Comercio de Energia Eletrica S.A., a wholly-owned subsidiary of the Portuguese Group CME ,was granted the authorization to build a wind power plant located in the state of Ceara (30 MW in capacity). The 35-year contract was signed with the regulatory agency ANEEL in March 2012. The power plant was named EOL Cataventos Paracuru I. The total investment in the power plant was estimated at US$ 46.4 million (BRL 109 million) and was financed with a loan granted by the state-owned development bank BNDES approved in February 2014 (US$ 34.5 million or BRL 81 million). The government periodically runs public bidding for the sale of energy to the country´s distribution companies. The power plant EOL Cataventos Paracuru I won the public bidding that took place in 2011, by offering an average tariff of US$ 63.1/MWh (BRL 103/MWh). The project company signed 20-year power purchase agreements with the several electricity distribution companies and committed to start supplying to the market in 2014. 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. Construction works commenced in June 2013 and were still underway as of December 2014.