Ourinhos Hydro Power Plant

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In November 1999, the Brazilian company Guascor was awarded in a competitive bidding process organized by the federal regulatory agency Aneel the 35-year contract to build and operate a 44-MW hydro power plant located in the Paranapanema River, state of Parana. Information on the other bidders was not available. 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$ 0.037 million (BRL 0.089 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$ 0.35 million). The contract was signed in May 2000, and sponsor created the company Ourinhos Energia to lead the project during the 35-year contract period. In 2003, construction works were stalled due to financial difficulties faced by the private sponsor. In June 2003, Companhia Brasileira de Alumínio, a wholly-owned subsidiary of Grupo Votorantim, acquired the shares of Ourinhos Energia. The sponsor committed to invest US$ 49.4 million (BRL 120 million) in the power plant. Construction works resumed in 2003, and perations commenced by the end of 2005. Financing for the project was provided with equity.