Linhares Thermal Power Plant

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Linhares Geracao, wholly-owned subsidiary of Linhares Brasil Energia Participacoes S.A. (Fundo de Participacoes Brasil Energia, 78%; and Linhares Energia Ltda, 22%), was granted the authorization to build and operate a 204 MW-natural gas thermal power plant located in the state of Espirito Santo. The 35-year contract was signed with the regulatory agency Aneel in March 2009. In September 2008, Linhares Geracao took part and won a competitive bidding to guarantee power purchase agreements. The bidding criteria set by the regulatory agency ANEEL was the lowest tariff. The 15-year contract was signed in October 2008. Linhares Geracao signed agreements to sell the electricity production to 30 distribution companies of the regulated market. The sponsor committed to invest US$ 196.7 million (BRL 360 million) in the power plant. Financial closure was achieved in June 2010, when the sponsor was granted a US$ 106 million (BRL 186.6 million) loan from BNDES. Short term financing was also granted by private banks: Itau BBA and Standard Investimento. The remaining cost was set to be financed with the sponsors’ internal resources. Construction works commenced in early 2009 and were finished in December 2010. The plant started operations in January 2011.