Monjolinho Hydro Power Plant

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In December 2001, the Brazilian company Desenvix was awarded in a competitive bidding process organized by the federal regulatory agency Aneel the 35-year contract to build and operate a 74-MW hydro power plant located in the Passo Fundo River, state of Rio Grande do Sul. No information was available on the other bidders. The bidding criteria set by the federal regulatory agency ANEEL was the highest payment to the government for the concession rights. The company agreed to pay US$ 1.3 million (BRL 2.4 million) in yearly installments during the life of the contract, starting once operations commence (using a discount rate of 10%, the present value of this contribution was estimated at US$ 11.9 million). The contract was signed in April 2002, and sponsors created the company Monel Monjolinho Energetica to lead the project during the 35-year contract period. All the electricity produced was set to be sold to distribution companies. The sponsor committed to invest US$ 153.6 million (BRL 281 million) in the power plant. Financial closure was achieved in January 2008, when the sponsor was granted a US$ 92.1 million (BRL 168.5 million) loan from BNDES. The remaining cost was financed with the sponsors’ internal resources. Construction works started in Junho 2007, and operations commenced in September 2009.