Eldorado Thermal Power Plant - Phase 2

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The Brazilian company Usina Eldorado S.A., a subsidiary of Odebrecht Agroindustrial (fomerly known as ETH Bioenergia - Odebrecht Group), was granted an authorization to build a 25-MW sugar-cane residue fueled power plant located in the state of Mato Grosso do Sul (municipality of Rio Brilhante). The power plant was named UTE Eldorado (ID# 5564). In October 2004, the company signed a 30-year contract with the regulatory agency ANEEL allowing the company to build and operate the power plant. The power plant commenced operations as a captive unit in 2006, but the new contract allowed the trade electricity also to large consumers in the unregulated market. Investment on the first phase was estimated at US$ 15.4 million. In August 2010, UTE Eldorado took part in a competitive bidding process to sell electricity to the regulated wholesale market (a 15-year power purchase agreement was signed guaranteeing the sale of electricity to the national grid). In October 2013, the company took part in another bidding process to establish 30-year power purchase agreements with electricity distribution companies. The company won the contracts by offering the tariff of US$ 39.7/MWh (BRL 132.3/MWh). The company committed to start supplying electricity to the regulated market by 2018. The power purchase agreement required the power plant to expand its capacity to 141 MW. The investment committed to the expansion was estimated at US$ 64.6 million (BRL 215.4 million). Construction works commenced in June 2014 and were nearly concluded 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.