Rialma Small Hydro Power Plants

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The Brazilian company RC Administracao e Participacoes S.A., a wholly-owned subsidiary of Grupo Rialma, was granted the authorization to build four small hydro power plant located in the state of Goias (68.8 MW in total capacity). The 30-year contracts were signed with the regulatory agency ANEEL starting in April 2001. Grupo Rialma named to power plants PCH Santa Edwiges II (13 MW), PCH Santa Edwiges III (11.6 MW), PCH Pontal do Prata (14.2 MW) and PCH Santo Antonio do Caiapo (30 MW). Grupo Rialma established power purchase agreements with the electricity distribution CELG to sell all the power generated by the power plants, which became operational in the following dates: PCH Santa Edwiges II - January 2006 - Investment: US$ 19.7 million (BRL 43 million) PCH Santa Edwiges III - January 2009 - Investment: US$ 29 million (BRL 57.9 million) PCH Pontal do Prata - April 2012 PCH Santo Antonio do Caiapo - December 2012 The investment on the power plants PCH Pontal do Prata and PCH Santo Antonio do Caiapo was not available. 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. In 2009, the company applied for carbon credits.