ERB Candeias Thermal Power Plant

Active

The Brazilian company ERB - Energias Renovaveis do Brasil S.A. (a partnership of the investment funds FIP Ambiental, 26,4%; Rioforte Investment Holding, 26.2%; state-owned FI-FGTS, 26.2% and BNDES Participacoes, 20.5%) was granted the authorization to build and operate a 16.8-MW wood-residue fueled power plants located in the state Bahia. The power plant was named UTE ERB Candeias, and the sponsors created the company ERB Aratinga S.A. to manage the project. The 35-year contract was signed with the regulatory agency ANEEL in October 2012. The value of the investment committed to UTE ERB Candeias was estimated at US$ 16.3 million (BRL 38.4 million). UTE ERB Candeias won the public bidding that took place in December 2013 to sell electricity to several distribution companies, by offering a tariff of US$ 57.6/MWh (BRL 135.5/MWh). The project company signed 15-year power purchase agreements with the several electricity distribution companies. UTE ERB Cadeias committed to start supplying to the market in 2018. 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. Finally, the electricity sold by the company was free from sectoral taxes. As of December 2013, the construction works were in its final stages. Commercial operations commenced in October 2014.