Empresa de Transmissao Timoteo-Mesquita

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In September 2011, the Brazilian company Orteng Energia Ltda was awarded in a competitive bidding process the contract to build and operate 24-km of transmission lines and one substation located in the state of Minas Gerais. The transmission line was set to connect Mesquita Substation and Timoteo Substation (230 kV, single circuit). In addition, the sponsor committed to build a new substation with planned capacity of 230 kV named SE Timoteo 2. Besides Orteng, two other companies took part in the contest: the Brazilian company TAESA-Transmissao Alianca de Energia and the Brazilian state-owned company Furnas Centrais eletricas S.A. . The bidding criteria set by the regulatory agency ANEEL was the lowest required annual revenue. Orteng presented the lowest offer, a total value of US$ 1.8 million (BRL 2.87 million), 13% below the ceiling set by the regulatory agency. The contract was signed in January 2012 and the sponsors created the company Empresa de Transmissao Timoteo-Mesquita Ltda to lead the project during the 30-year contract period. The sponsor committed to invest US$ 15.7 million (BRL 37 million) in the transmission line. In October 2014, the sponsor was granted a US$ 5.5 million (BRL 13 million) loan from Minas Gerais state-owned bank BDMG. The remaining cost was set to be financed with the sponsors’ internal resources. Environmental clearance was awarded in July 2013. As o December 2014, construction works were underway. Operation was expected to commence in 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.