Empresa Litoranea de Energia S.A. – ELTE

active

In May 2014, the Brazilian company Alupar Investimentos S.A. was awarded in a competitive bidding process the contract to build and operate the 20-km transmission line connecting SE Henry Boeden and Manoel da Nobrega, located at the state of Sao Paulo. The project also included the construction of two new substations: Manoel da Nobrega ( 230/80 kV-75 MVA) and Domenico Rangoni (345/138 kV-133 MVA). Two other companies took part in the contest: ABENGOA CONTRUCAO BRASIL LTDA; and CPFL S/A. The bidding criteria set by the regulatory agency ANEEL was the lowest required annual revenue. Alupar presented the lowest offer, a total value of US$ 9.7 million (BRL 28.9 million), 4.99% below the ceiling set by the regulatory agency. The 35-year contract was signed in September 2014, and the sponsor created the company Empresa Litoranea de Energia S.A. – ELTE to lead the project during the 30-year contract period. The sponsor committed to invest US$ 88 million (BRL 262 million) in the transmission line. In April 2015, Alupar S.A. issued bonds in the amount of US$ 84 million (BRL 250 million) to finance four of its transmission projects, including the one led by ELTE. The funds raised with the bond issuance would finance 41.7% of ELTE's investment needs. Construction works were underway as of December 2014, and commercial operation was set to commence by September 2017. 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 accelated depreciation methods of accounting for construction expenditures.