Linhas de Taubate Transmissora de Energia

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In September 2011, the Brazilian company Isolux Energia e Participacoes S.A. , a subsidiary of the Spanish company Isolux, was awarded in a competitive bidding process the contract to build and operate 247-km of transmission lines and one substation located in the states of Sao Paulo and Rio de Janeiro. The 500-kV transmission line was set to connect the city of Taubate (Sao Paulo) to the city of Nova Iguacu (Rio de Janeiro). The substation had a planned capacity of 500/345 kV and was named SE Nova Iguacu. Besides Isolux Energia e Participacoes S.A., four other companies took part in the contest: Consorcio Linha Verde; the state-owned Brazilian company Furnas Centrais Eletricas S/A; the Brazilian company ALUPAR INVESTIMENTO S.A; and CTEEP- Companhia de Transmissao de Energia Eletrica Paulista (subsidiary of the Colombian company ISA). The bidding criteria set by the regulatory agency ANEEL was the lowest required annual revenue. Isolux Energia e Participacoes S.A. presented the lowest offer, a total value of US$ 17.1 million (BRL 27.98 million), 44% below the ceiling set by the regulatory agency. The contract was signed in November 2011, and the sponsors created the special purpose company Linhas de Taubate Transmissora de Energia S.A. to lead the project during the 30-year contract period. The sponsor committed to invest US$ 175.3 million (BRL 412 million) in the transmission line. To finance the project, the sponsor made four bond issuances: 2012 - US$ 76.8 million (BRL 150 million) 2013 - US$ 70.2 million (BRL 165 million) Environmental clearance was awarded in December 2011. As of January 2015, construction works were underway and commercial operation was expected for March 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 accelated depreciation methods of accounting for construction expenditures. In December 2014, the state-owned bank BNDES approved a US$ 83.4 million (BRL 196 million) loan to the project. In February 2015, BNDES approved an additional US$ 15.5 million (BRL 46.2 million) loan.