Pacific Hydro Wind Farm Project

active

In March 2004, the company Vales dos Ventos Geradora Eolica S.A., a wholly-owned subsidiary of the Australian company Pacific Hydro, was granted several authorizations by the regulatory agency ANEEL to build and operate wind power plants located in the state of Paraiba (municipality of Mataraca). Ten power units were set to have the capacity of 4.8 MW each (Vales dos Ventos Wind Farm), while one unit would have the capacity of 10.2 MW (the contract for this last unit was signed in January 2004 and was initially granted to Millennium Inorganic Chemicals do Brasil S.A., and then transferred to Millennium Central Geradora Eolica S.A., also a subsidiary of Pacific Hydro). The 25-year contracts signed with ANEEL allowed the power plants to operate in the electricity market as independent producers (the contract for the 10.2 MW power plant was set to last for 30 years instead). These authorizations granted the sponsor with the right to sell electricity in the Brazilian wholesale market. The construction of the Millennium wind park involved an investment of US$ 22.7 million (BRL 45.5 million). Financial closure was achieved in December 2005 with a US$ 16.4 million (BRL 32.7 million) loan from the state-owned bank BNB. Operations on this power plant commenced in April 2008. The total investment commitment to the Vale dos Ventos wind park was estimated at US$ 125 million (BRL 250 million). Construction works began in 2007, but financial closure was only achieved in June 2009, when the state-owned bank BNB approved a US$ 81 million (BRL 162 million) loan. The sponsors financed the remaining of the investment cost with equity. Pacific Hydro signed power purchase agreements arranged with the state-owned company Eletrobras for 20 years through the Brazilian Federal program PROINFA (incentive program for alternative power generating companies).