Lajes Small Hydro Power Plant

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Lajes Energia S.A., a subsidiary of the Brazilian company Light (a joint-venture of the state-owned company Cemig (31%), state-owned bank BNDES (9%), Andrade Gutierrez (8%) and investment funds (52%)), was granted the authorization to build and operate a 17-MW hydro power plant located in the state of Rio de Janeiro (Ribeirao das Lajes River). The power plant was named PCH Lajes and its construction was set to replace an old power plant that ceased to operate in 1989. A 30-year authorization contract was granted by the regulatory agency ANEEL in May 1996, and this authorization was transferred to Light S.A. in August 2013. In March 2015, a power purchase agreement was signed with Light Energia for a total of 8 MW. The investment committed to the power plant was estimated at US$ 21 million (BRL 70 million). The EPC contract was signed with WEG Equipamentos Eletricos S.A. e Hidraulica Industrial S.A in August 2014. Construction works commenced in the same month and were nearly concluded by December 2015. Commercial operations were expected to commence in May 2016. 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 May 2016, the state-owned bank BNDES approved a US$ 11.2 million (BRL 51.6 million) loan to the project.