Guaraciaba Transmissora de Energia

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In March 2012, Consorcio Guaraciaba S.A., a partnership of the companies the Brazilian state-owned company Copel Geração e Transmissao S.A (49%) and the Chinese company State Grid Brazil Holding S.A. (51%), was awarded the contract to build and operate the 600-km transmission line Ribeiraozinho - Rio Verde do Norte - Marimbondo II, located at the states of Mato Grosso, Goias e Minas Gerais (500 kV in capacity). Besides Consorcio Guaraciaba, two other bidders took part in the contest: Consorcio Marimbondo; and Consorcio Sudoeste Goiano de Transmissao. The bidding criteria set by the regulatory agency ANEEL was the lowest required annual revenue. Consorcio Guaraciaba presented the lowest offer, a total value of US$ 19.7 million (BRL 73 million), 36.96% below the ceiling set by the regulatory agency. The contract was signed in May 2012 , and the sponsors created the company Guaraciaba Transmissora de Energia S.A. (TP Sul) to lead the project during the 30-year contract period. The sponsor committed to invest US$ 204.2 million (BRL 756.2 million) in the project. In June 2016, the state-owned bank BNDES approved a US$ 118.8 million (BRL 440 million) loan to finance the project. The remaining investment cost was equity financed (US$ 85.4 million). 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.