Companhia Energetica Vale do Tijuco

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The Brazilian company Companhia Energetica de Acucar e Alcool Vale do Tijuco Ltda, a subsidiary of the Brazilian holding company Companhia Mineira de Açucar e Alcool Participacoes (CMAA) , was granted authorizations to built and operate two sugar-cane-residue fueled power plants (total capacity of 85 MW) located in the state of Minas Gerais. The 35-year contracts were signed with the regulatory agency ANEEL over the years starting in February 2009. The power plants were named UTE Vale do Tijuco (45 MW) and UTE Vale do Tijuco II (40 MW). UTE Vale do Tijuco commenced commercial operations in May 2010, while UTE Vale do Tijuco II commenced operations in May 2012. The value of the investment committed to UTE Vale do Tijuco was not available; the investment in UTE Vale do TIjuco II power plant expansion was estimated at US$ 42.4 million (BRL 83.80 million). UTE Vale do Tijuco won the public bidding for the sale of electricity to the regulated market that took place in 2018, by offering an average tariff of US$ 62.5/MWh (BRL 59.52/MWh), while UTE Vale do Tijuco II won the public bidding 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. UTE Tijuco committed to start supplying the market in 2011 and UTE Tijuco II in 2014. The sponsor 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.