Garibaldi Hydroelectric Power Plant

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In July 2010, the Brazilian company Triunfo Participacoes e Investimentos was awarded in a competitive bidding process the contract to build and operate a 178 MW hydro power plant located in the Canoas River, state of Santa Catarina. Besides Triunfo, four other companies took part in the bidding contest: Spanish company Alupar,Consorcio Araca (Brazilian state-owned companies Eletrosul, 49%, and Copel, 51%), Consorcio UHE Garibaldi (Brazilian companies Neoenergia, 51%, and state-owned Cemig Geracao, 49%), and Gaia Energia. The bidding criteria set by the regulatory agency ANEEL was the lowest tariff. Triunfo presented the lowest offer, a value of US$ 64.2/MWh (BRL 107.98/MWh), 19% below the ceiling set by the regulatory agency. The contract was signed in December 2010, and sponsors created the company Rio Canoas Energia to lead the project during the 35-year contract period. Rio Canoas Energia committed to sell 70% of the output to the regulated market (a 30-year power purchase agreement was signed) and the remaining 30% to the unregulated market. Environmental regulator, Ibama, awarded an environmental license for the project in January 2011. The sponsor committed to invest US$ 428.1 million (BRL 720 million) in the power plant. In June 2012, the sponsor was granted a US$ 186.3 million (BRL 368 million) loan from state-owned bank BNDES. In August 2012, the sponsor issued bonds worth US$ 50.6 million (BRL 100 million). The remaining cost was set to be financed with sponsor's internal resources. As of October 2012, construction works were underway. Commercial operation (first turbine) is expected to commence in October 2014. 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. Commercial operations commenced in September 2013. In August 2015, Triunfo sold its stake in the project to China Three Gorges Brasil Energia Ltda. (“CTG Brasil”).