Companhia Energetica do Maranhao (CEMAR)

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CEMAR is the electricity concessionaire of the state of Maranhao, where it distributes power to around 977,000 customers in 217 municipalities. CEMAR has a 30-year contract to provide electricity services in the state (contract renewed in Aug. 2000). In June 2000, Pennsylvania Power & Light (PPL), through its subsidiary Brisk Participacoes, acquired 84.7% of CEMAR's shares for US$ 288.8 million. Still in 2002, Aneel, the Brazilian energy regulatory agency, intervenied in the company and took over its management. The takeover was due to the financial problems faced by the company in August of 2002. Cemar’s sponsor, PPL, couldn’t handle the company’s debt, which amounted US$ 260 million (R$ 760 million) in August of 2002. Aneel managed the company until PPL hand over the company to a new private sponsor, which would be selected through a competitive bidding process. In May 2004, CEMAR's corporate control was transferred by PPL to a new private sponsor - SVM Participacoes e Empreendimentos Ltda, a company controlled by private equity funds of GP Investimentos. The transfer ended Aneel's intervention in the company and the management of Cemar was handed over shortly after the transaction. GP Investmentos has a plan of financial restructuring for Cemar, approved by Aneel. In November 2007, the IFC approved financing of US $69.2million to support a US $307 million network expansion investment plan. In May 2004, CEMAR's corporate control was transfered by PPL to a new private sponsor - SVM Participacoes e Empreendimentos Ltda, a company controlled by private equity funds of GP Investimentos. The transfer ended Aneel's intervention in the company and the management of Cemar was handed over shortly after the transaction. GP Investmentos has a plan of financial restructuring for Cemar, approved by Aneel. In 2001 the company invested US$ 56.9 million (R$ 126.6 million) and the total electricity consumption was 2,294,542 MWh. In the following year, 2002, the investments amounted to US$ 13.1 million (R$ 38.4 million) and the total electricity consumption raised to 2,393,251 MWh. During 2007-2009, Cemar will implement capital expenditures (the Investment Plan) whose primary objectives are to: - modernize and expand the company’s distribution network to connect new customers and meet rapid energy demand growth; - improve the reliability and quality of electricity served; and - enhance operational efficiency, through energy losses reduction, IT system upgrades, work facilities consolidation and energy efficiency initiatives. The proposed project involves IFC financing of up to $80-100 million equivalent to partly finance the Investment Plan. Investment in Luz Para todos program, in which US $100 million was invested in 2007, US $102 million were invested in 2008 and US$ 89.9 million in 2009.