J. Malucelli Energia SHPPs

active

The Brazilian company J. Malucelli Energia, a wholly-owned subsidiary of Grupo J. Malucelli, was granted the authorization to build five small hydro power plant located in the states of Goias, Parana and Mato Grosso (76.1 MW in total capacity). The 30-year contracts were signed with the regulatory agency ANEEL starting in December 2002. J. Malucelli Energia was set to control directly the project management of the following power plants: PCH Burro Branco (10 MW), PCH Foz do Turvo (8.8 MW), PCH Pinhalzinho (10.9 MW) and PCH Portão (16.4 MW). For PCH Queixada (30 MW), the management was transferred to Queixada Energetica S.A. Only this latter project is under advanced development. In August 2010, PCH Queixada took part in a competitive bidding process to sell electricity to the regulated wholesale market (15-year power purchase agreement was signed guaranteeing the sale of electricity to the national grid). J. Malucelli Energia committed to invest US$ 124.9 million (BRL 210 million) in the construction of the Queixada power plant. As of July 2011, construction works were underway, and commercial operations commenced in September 2012. In October 2012, PCH Queixada received a US$ 25.4 million (BRL 49.5 million) loan from the state-owned bank BNDES. 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. In 2010, the company applied for carbon credits.