Guacu Thermal Power Plant

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The Brazilian company Carman Participacoes e Incorporacao Ltda (Carman) was granted the authorization to build and operate a 30-MW wood-residue fueled power plant located at the state Mato Grosso. The power plant was named UTE Guacu, and the sponsor created the company Guacu Geracao de Energia S.A. to manage the project. The 35-year contract was signed with the regulatory agency ANEEL in May 2012. The value of the investment committed to UTE ERB Candeias was estimated at US$ 36.8 million (BRL 86.7 million). UTE Guacu won the public bidding that took place in March 2011 to sell electricity to several distribution companies, by offering a tariff of US$ 43.3/MWh (BRL 102/MWh). The project company signed 15-year power purchase agreements with the several electricity distribution companies. UTE Guacu committed to start supplying to the market in 2014. In May 2013, UTE Guacu commenced commercial operation. 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.