Chui Wind Farm

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The company Chui Holding S.A., a partnership of the Brazilian investment fund Rio Bravo Energia (51%) and the Brazilian state-owned company Eletrosul (49%), was granted authorizations to build six wind power plants located in the state of Rio Grande do Sul (144 MW in total capacity, municipalities of Chui). The partners established six companies to lead the projects: * Eolica Chui I S.A. - EOL Chui I (24 MW) * Eolica Chui II S.A. - EOL Chui II (22 MW) * Eolica Chui IV S.A. - EOL Chui IV (22 MW) * Eolica Chui V S.A. - EOL Chui V (30 MW) * Eolica Minuano I S.A. - EOL Minuano I (22 MW) * Eolica Minuano II S.A. - EOL Minuano II (22 MW) The 35-year contracts were signed with the regulatory agency ANEEL starting in February 2012. The total investment in the power plants was estimated at US$ 342.9 million (BRL 806 million). In December 2014, the state-owned bank BNDES approved a US$ 161.5 million (BRL 379.6 million) loan do the project. In June 2015, BNDES approved another US$ 127.6 million (BRL 379.8 million) to the project. The six power plants controlled by Chui Holdings won the public bidding for the sale of energy to the country´s distribution companies run by the government that took place in 2011, by offering an average tariff of US$ 62.5/MWh (BRL 102/MWh). The project companies signed 20-year power purchase agreements with the several electricity distribution companies , and the agreements included the annual adjustment of the tariff to the inflation rate. Chui Holding committed to start supplying the market in 2014. As of December 2014, construction works were underway, and commercial operations were expected to commence in mid-2015. The projects 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. Finally, the electricity sold by the company is not subject to sectoral taxes.