Salto Pilao Hydro Power Plant

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In December 2001, the Brazilian company Consorcio Empresarial Salto Pilao-CESAP was awarded in a competitive bidding process organized by the federal regulatory agency Aneel the 35-year contract to build and operate a 182.3-MW hydro power plant located in the Itajai River, state of Santa Catarina. CESAP was established as a partnership of Companhia Brasileira de Aluminio (60%), a wholly-owned subsidiary of Votorantim, Camargo Correa Energia (20%), and government-owned DME Energetica (20%). Information on the other bidders was not available. The bidding criteria set by the federal regulatory agency ANEEL was the highest payment to the government for the concession rights. The company agreed to pay US$ 7 million (BRL 17 million) in yearly installments during the life of the contract, starting once operations commence (using a discount rate of 10%, the present value of this contribution was estimated at US$ 104 million). The contract was signed in April 2002, and sponsor created the company Ourinhos Energia to lead the project during the 35-year contract period. The sponsor committed to invest US$ 205.8 million (BRL 500 million) in the power plant. Financial closure was achieve in June 2005, when the state-owned bank BNDES granted a US$ 113.3 million (BRL 275.4 million) loan to CESAP. The remaining cost was set to be financed with equity. Construction works started in August 2006, and operations commenced by December 2009.