Chesf-Brennand Sento Se Wind Farms Phase III

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The companies Brazilian Brennand Energia S.A. (Grupo Brennand; 50.90%) and the state-owned company CHESF (49%) were granted authorizations to a wind complex in the state of Bahia. The wind farm was set to be built in three phases. The following special purpose companies were created to manage each plant: Phase I (registered in the database with ID# 6871): * Pedra Branca S.A. - EOL Pedra Branca (30 MW) * Sao Pedro do Lago S.A. - EOL Sao Pedro do Lago (30 MW) * Sete Gameleiras S.A. - EOL Sete Gameleiras (30 MW) Phase II (registered in the database with ID# 8267): * Mussambe Energetica S.A. – EOL Mussambe (30 MW) * Morro Branco I Energeica S.A. – EOL Morro Branco I (30 MW) * Baraunas I Energetica S.A. – EOL Baraunas I (30 MW) This present project is the third phase of the wind complex: * Baraunas II Energetica S.A. – EOL Baraunas II (21.6 MW) * Banda de Couro Energetica S.A. – EOL Banda de Couro (12.9 MW) The 35-year contracts were signed with the regulatory agency ANEEL starting in June 2014. In December 2013, both power plants had been granted 20-year power purchase agreements with the several electricity distribution companies through public biddings. The sponsors offered an average tariff of US$ 51.4/MWh (BRL 120.90/MWh). The total investment in this third phase was estimated at US$ 53.8 million (BRL 179.5 million). Construction works commenced in September 2015 and were in advanced stages by December 2015. 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. In June 2016, the state-owned bank BNDES approved a US$ 31.2 million (BRL 115.6 million) loan to the project.