Itaqui Power Plant

active

In October 2007, the Brazilian company Diferencial Energia Empreendimentos e Participacoes was one of the companies that emerged as winners in a competitive bidding process organized by the federal agency CCEE for the future sale of electricity to the Brazilian regulated market (energy that is sold exclusively to the distribution companies). The goal was to arrange a power purchase agreement for the sale of the output of a 360 MW coal-fired power plant yet to be built in the city of Itaqui, State of Maranhao. The bidding process guaranteed the company the sale of 315 MW annually in the Brazilian regulated market (energy that is sold exclusively to the distribution companies). This represented annual revenues of US$ 123.6 million (BRL 247.1 million) for 15 years. The remaining 45 MW could be sold in unregulated wholesale markets. The power purchase agreement guaranteed the full recovery of the fuel costs in addition to exchange rates fluctuations. A 35-year license contract was signed with the federal regulatory agency ANEEL in May 2008. In February 2009, the project company changed its name from Diferencial Energia Empreendimentos e Participacoes to UTE Porto do Itaqui Geracao de Energia S.A. , a wholly-owned subsidiary of MPX Energia (EBX Group). The total investment in the ten facilities was estimated at US$ 900 million (BRL 1.8 billion). Financial closure for the project was reached in December 2009, when the company had a US$ 620.5 million (BRL 1241 million) loan from the state-owned bank BNDES. The financing package included US$ 398.5 million (BRL 797 million) from BNDES own resources; US$ 120.5 million (BRL 241 million) syndicated loans from Bradesco and Votorantim; and US$ 101.5 million (BRL 203 million) syndicated loans from Bradesco and Votorantim. In March 2009, the IADB had already approved a US$ 140 million loan package to the project, which included US$ 50 million A-loan and US$ 90 million in syndicated loans. The remaining investment expenditures were set to be financed with the sponsors’ equity. The Porto de Itaqui TPP has an EPC (Engineering, Procurement and Construction) contract signed with Mabe Construcao e Administracao de Projetos Ltda., a partnership between the companies Maire Tecnimont and EFACEC. Turbines will be supplied by Siemens and boilers by Doosan Babcock. The EPC contract relies on incentive mechanisms for early startup and various performance guarantees such as Delay Damages, Performance Liquidated Damages, Performance Bond, Advance Payment Bond and Parent Company Guarantee Construction works started in the first half of 2009 and operations were set to commence prior to 2012, when the sponsors committed to start supplying the regulated energy market. As of April 2010, 50% of the constructions works were completed. Operations commenced in February 2013. In September 2013, EBX sold part of its ownership in MPX, the subsidiary of EBX Capital Partners responsible for managing the group's energy projects. MPX changed its name to Eneva, and its ownership structure was established as follows: EBX, 20%; the German company E.ON, 42.9%; free float, 37.1%.