Renova Energia Alto Sertao II Wind Farm

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The Brazilian company Renova Energia was granted authorizations to build fifteen wind power plants located in the state of Bahia (364.2 MW in total capacity, municipalities of Caetite, Guanambi, Igapora, Urandi and Pindai). The project was named Alto Sertao II Wind Park. The following project companies were created to manage the power plants: * Centrais Eolicas Ventos do Nordeste Ltda - EOL Ventos do Nordeste (19.5 MW) * Centrais Eolicas da Prata Ltda - EOL Da Prata (19.5 MW) * Centrais Eolicas dos Aracas Ltda - EOL Dos Aracas (30 MW) * Centrais Eolicas Morrao Ltda - EOL Morrao (30 MW) * Centrais Eolicas Tanque S.A. - EOL Tanque (24 MW) * Centrais Eolicas Seraima S.A. - EOL Seraima (30 MW) * Centrais Eolicas Maron S.A. - EOL Maron (28.8 MW) * Centrais Eolicas Piloes S.A. - EOL Piloes (28.8 MW) * Centrais Eolicas Dourados S.A. - EOL Dourados (28.8 MW) * Centrais Eolicas Serra do Espinhaco S.A. - EOL Serra do Espinhaco (17.6 MW) * Centrais Eolicas Espigao S.A. - EOL Espigao (9.6 MW) * Centrais Eolicas Borgo S.A. - EOL Borgo (19.2 MW) * Centrais Eolicas Pelourinho S.A. - EOL Pelourinho (20.8 MW) * Centrais Eolicas Ametista S.A. - EOL Ametista (28.8 MW) * Centrais Eolicas Caetite S.A. - EOL Caetite (28.8 MW) The 35-year contracts were signed with the regulatory agency ANEEL starting in April 2011. The total investment in the power plants and the associated transmission line was estimated at US$ 717.2 million (BRL 1400 million). Of this total, US$ 420.1 million (BRL 820 million) referred to a equipment supply contract Renova signed with GE in December 2012. In December 2012, the state-owned development bank BNDES approved US$ 153.7 million or BRL 300 million in loans to finance the project. In addition, Renova issued long-term bonds amounting to US$ 154.2 million (BRL 301 million) to finance the power plants, and increased its capital by US$ 161.2 million (BRL 314.7 million). In January 2013, an additional US$ 297 million (BRL 699 million) was granted by BNDES to roll over the first debt and to help financing the project. In June 2014, BNDES approved another US$ 443.5 million (BRL 1044 million) to finance the remaining of the capital expenditures. The government periodically runs public bidding for the sale of energy to the country´s distribution companies. The fifteen power plants controlled by Renova won the public bidding that took place in 2010 and 2011, by offering an average tariff of US$ 56.3/MWh (BRL 110/MWh). The project companies signed 20-year power purchase agreements with the several electricity distribution companies, and the agreements included the annual adjustment of the tariff to the inflation rate. Renova committed to start supplying to the market in September 2013 and March 2014. 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 accelated depreciation methods of accounting for construction expenditures. Finally, the electricity sold by the company is not subject to sectoral taxes. In 2012, the company applied for carbon credits. EOL Seraima, EOL Tanque and EOL Ventos do Nordeste were the first units to commence operations in October 2014.