Pedra Cheirosa Wind Park

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The Brazilian company CPFL Energia was granted the authorization to build two wind power plants located in the state of Ceara, municipalities of Itarema (50 MW in total capacity). The 35-year contracts were signed with the regulatory agency ANEEL starting in July 2014. The company CPFL Energias Renovaveis created two special purpose companies to manage the projects: EOL Pedra Cheirosa I - Pedra Cheirosa I Energia Ltda (26 MW) EOL Pedra Cheirosa II - Pedra Cheirosa II Energia Ltda (24 MW) The total investment in the power plants was estimated at US$ 64.4 million (BRL 257.3 million). Financial closure was achieved in March 2016, when CPFL was granted a US$ 25 million loan from the Brazilian bank Itau/Unibanco. The remaining investment cost was equity financed. Construction works commenced in April 2016, and were expected to be concluded by 2017. The government periodically runs public bidding for the sale of energy to the country´s distribution companies. The power plants won the public bidding that took place in December 2013 by offering an average tariff of US$ 31.7/MWh (BRL 117.4/MWh). The project companies signed 20-year power purchase agreements with the several electricity distribution companies. The power plants were expected to start supplying the market in 2018. 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 accelerated depreciation methods of accounting for construction expenditures.