Geribatu Wind Park

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The company Santa Vitoria do Palmar Holding, a partnership of the Brazilian investment fund Rio Bravo Energia (51%%) and the Brazilian state-owned company Eletrosul (49%), was granted authorizations to build ten wind power plants located in the state of Rio Grande do Sul (252 MW in total capacity, municipality of Santa Vitoria do Palmar). The partners established ten companies to lead the projects: * Eolica Geribatu I S.A. - EOL VERACE I (20 MW) * Eolica Geribatu II S.A. - EOL VERACE II (20 MW) * Eolica Geribatu III S.A. - EOL VERACE III (26 MW) * Eolica Geribatu IV S.A. - EOL VERACE IV (30 MW) * Eolica Geribatu V S.A. - EOL VERACE V (30 MW) * Eolica Geribatu VI S.A. - EOL VERACE VI (18 MW) * Eolica Geribatu VII S.A. - EOL VERACE VII (30 MW) * Eolica Geribatu VIII S.A. - EOL VERACE VIII (26 MW) * Eolica Geribatu IX S.A. - EOL VERACE IX (30 MW) * Eolica Geribatu X S.A. - EOL VERACE X (28 MW) The 35-year contracts were signed with the regulatory agency ANEEL starting in February 2012. The total investment in the power plants was estimated at US$ 417 million (BRL 981.6 million). The ten power plants won the public bidding for the sale of energy to the country´s distribution companies run by the government that took place in 2011, by offering an average tariff of US$ 60.2/MWh (BRL 98.2/MWh). The project companies signed 20-year power purchase agreements with the several electricity distribution companies , and the agreements included the annual adjustment of the tariff to the inflation rate. The sponsors committed to start supplying the market in March 2014. As of March 2013, the environmental licenses had been issued, and construction works had commenced. The projects were 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. Finally, the electricity sold by the company is not subject to sectoral taxes. In 2012, the sponsors applied for carbon credits. In December 2013, the state-owned bank BNDES approved a US$ 171.6 million (BRL 404 million) loan to finance the construction of the power plants.