Raizen Thermal Power Plants

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The company Raizen Energia S.A., a partnership of the Dutch company Shell (50%) and the Brazilian company Cosan (50%), was granted the authorization to build four thermal power plant located in the state of Sao Paulo. The projects were initially granted to Cosan's subsidiaries, which were dedicated to sugar-cane processing business. In February 2011, the projects were transferred to Raizen Bioenergia, when the partnership between Shell and Cosan became with the merger of these two companies' assets. In November 2012, a newly created company, Raizen Energia S.A., undertook the management of all projects. The four sugar-cane residue fueled power plants had a total capacity of 278 MW. The power plants were named: UTE Gasa (82 MW) UTE Usina da Serra (15 MW) UTE Barra Bioenergia (136 MW) UTE Univalem Bioenergia (45 MW) The 30-year contract were signed with the regulatory agency ANEEL in January 2008. The construction of UTE Gasa was done in two phases: the first 40 MW became operational in August 2008 (investment amount was not available), while the remaining 42 MW became operational in June 2010. The power plant received a US$ 74.5 million (BRL 149 million) loan from the state-owned bank BNDES in June 2009 to finance this second phase, whose costs were estimated at US$ 95 million (BRL 190 million). UTE Gasa signed a 15-year power purchase contract with the electricity distribution company CPFL. In August 2008, UTE Barra Bioenergia took part in a competitive bidding process to sell electricity to the regulated wholesale market. The company offered the winning bid of US$ 32.8/MWh (BRL 60.04/MWh), and a 30-year power purchase agreement was signed guaranteeing the sale of electricity to the national grid for 15 years, starting in 2010. The power plant commenced operations in July 2010, and a total of US$ 195.9 million (BRL344.7 million) was invested in the power plant. As of October 2012, UTE Usina da Serra and UTE Univalem had not established power purchase agreements with distribution companies. Part of the electricity generated at the power plants were directed to the sugar-cane pressing facilities that belonged to the sponsors, and part of it was traded with large consumers in the unregulated market. UTE Usina da Serra became operational in May 2002 (investment amount was not available). UTE Univalem, which demanded investments of US$ million (BRL 180 million) commenced operations in November 2012. With regards to government support to these projects, the electricity sold by the project companies are not subject to sectoral taxes, and the companies receive a 50% discount on the transmission and distribution costs.