Porto do Pecem II Power Plant

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In September 2008, the Brazilian company MPX Pecem II Geracao de Energia S.A., a wholly-owned subsidiary of MPX Energia (EBX Group), was one of the companies that emerged as winners in a competitive bidding process organized by the federal agency CCEE for the future sale of electricity to the Brazilian regulated market (energy that is sold exclusively to the distribution companies). The goal was to arrange a power purchase agreement for the sale of the output of a coal-fired power plant yet to be built in the city of Sao Goncalo do Amarante, State of Ceara. The bidding process guaranteed the company the sale of 276 MW annually. This represented annual revenues of US$ 111 million (BRL 221.9 million) for 15 years. The remaining 84 MW was set to be sold in unregulated wholesale markets. The power purchase agreement guaranteed the full recovery of the fuel costs in addition to exchange rates fluctuations. A 35-year license contract was signed with the regulatory agency ANEEL in May 2009. The total investment in the ten facilities was estimated at US$ 640 million (BRL 1.28 billion). Financial closure for the project was reached in May 2009, when the company had a US$ 161.5 million (BRL 323 million) credit line approved by Itau Bank. In January 2009, US$ 152.5 million (BRL 305 million) in syndicated loans had already been arranged by Citibank (funding was raised from the banks Bradesco, Itau, Santander and Votorantim). The remaining investment expenditures were set to be financed with a long-term loan from state-owned bank BNDES and the sponsors’ equity. Construction works started in June 2009 and operations were set to commence prior to early 2013, when the sponsors committed to start supplying the regulated energy market. MPX Pecem II had EPC agreement (lump-sum turnkey contract format) with EPC Mabe Construcao e Administracao de Projetos Ltda, a joint-venture of the engineering companies Maire Tecnimont e EFACEC. Equipment was set to be acquired from Siemens and Doosan Babcok. As of May 2010, 45% of the construction works were concluded. Commercial operations commenced in October 2013. In September 2013, EBX sold part of its ownership in MPX, the subsidiary of EBX Capital Partners responsible for managing the group's energy projects. MPX changed its name to Eneva, and its ownership structure was established as follows: EBX, 20%; the German company E.ON, 42.9%; free float, 37.1%. After the restructuring, Porto de Pecem II Power Plant ownership was split 50/50 between Eneva and E.ON.