Salto Goes Small Hydro Power Plant

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The company SPE Salto Goes Energia S.A., a wholly-owned subsidiary of CPFL Energias Renovaveis S.A. (a partnership of the Brazilian companies CPFL Energia, 63.6%; and ERSA, 36.4%), was granted the authorization to build a small hydro power plant located in the state of Santa Catarina (20 MW in total capacity). The 30-year contract was signed with the regulatory agency ANEEL in August 2010. Also in August 2010, PCH Salto Goes had taken part in a competitive bidding process to sell electricity to the regulated wholesale market. The company offered the winning bid of US$ 83.8/MWh (BRL 147.47/MWh), and a 30-year power purchase agreement was signed guaranteeing the sale of electricity to the national grid for , starting in 2013. Salto Goes Energia committed to invest US$ 58.3 million (BRL 115.21 million) in the construction of the Salto Gooes power plant. In January 2012, SPE Salto Goes Energia S.A. was granted a loan from state-owned bank BNDES of US$ 43.1 million (BRL 85.21 million) to finance the construction works of Salto Goes power plant. As of November 2012, construction works were underway and commercial operations was estimated to commence in September 2013. 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 2011, the company applied for carbon credits. Construction works were concluded in December 2012.