Potiguar Sul Transmissao de Energia

active

In May 2013, the Brazilian company NC Energia S.A. (Neoenergia group, a joint-venture of the Spanish company Iberdrola, 39%; the Investment fund PREVI, 49%; and the state-owned bank Banco do Brasil, 12%) was awarded in a competitive bidding process the contract to build and operate the 196-km transmission line connecting CAMPINA GRANDE III - CEARÁ MIRIM II, C2. Besides NC Energia, no other bidder placed offers. The bidding criteria set by the regulatory agency ANEEL was the lowest required annual revenue. Neoenergia presented the lowest offer, a total value of US$ 8 million (BRL 18.8 million), 6.3% below the ceiling set by the regulatory agency. The contract was signed in August 2013 , and the sponsors created the company Potiguar Sul Transmissao de Energia S.A. to lead the project during the 30-year contract period. The sponsor committed to invest US$ 55.7 million (BRL 185.8 million) in the project. In August 2015, BNDES approved a US$ 26.5 million (BRL 88.4 million) loan to finance the project. In October 2015, Potiguar issued US$ 9.5 million (BRL 31.6 million) in long-term bonds. The remaining investment cost was set to be equity-financed. Construction works commenced in November 2014, and commercial operations were expected to begin by August 2016. 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.