Grupo USJ

active

The Brazilian company USJ Acucar Alcool S.A. was granted authorizations to build two thermal power plants located in the state of Goias (municipalities of Quirinopolis and Cachoeira Dourada). The cogeneration power plants were set to use sugar cane residues as fuel, as the company main line of business was the pressing of sugar-cane and the production of ethanol. The unit in Quirinopolis, also referred to as Usina Sao Francisco, was set to have a capacity of 40 MW, while the unit in Cachoeira Dourada was set to have a capacity of 80 MW. In June 2005, a 30-year contract was signed with the regulatory agency ANEEL allowing the Quirinopolis power plant to operate in the electricity market as an independent producer (this initial contract was cancelled as there were delays in the project implementation, but it was reinstated later on). In February 2009, Cachoeira Dourada was also authorized to operate in the electricity market as an independent producer (the contract had 35-year duration). These authorizations granted the sponsor with the right to sell electricity in the Brazilian wholesale market. In 2005, Quirinopolis power plant took part in a competitive bidding process to sell electricity to the regulated wholesale market (15-year power purchase agreements were signed guaranteeing the sale of electricity to the national grid). In 2008, the unit in Cachoeira Dourada was also able to sign 15-year power purchase agreements were signed guaranteeing the sale of electricity to the national grid. In March 2008, the IFC approved a US$ 40 million loan to finance the construction of both power plants and Grupo USJ’s investment in its sugar and ethanol producing plants. The total investment in cogeneration and sugar/ethanol production was estimated at US$ 355 million, as of 2008. Construction works on Quirinopolis power plant commenced in 2007 and the power plant was operating, as of 2009. The investment in the first phase of Cachoeira Dourada Power plant (40 MW generating unit) was estimated at US$ 35 million (BRL 70 million), as of 2009. The total investment in cogeneration and sugar/ethanol production in Cachoeira Dourada was estimated at US$ 115 million (BRL 230 million). The Cachoeira Dourada power plant was under construction in 2009, and operations were expected to commence in May 2011.