Santander Ceara & Rio Grande do Norte Wind Farms

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The company MS Participacoes Societarias, a wholly-owned subsidiary of the Spanish bank Santander, was granted authorizations to build four wind parks located in the state of Ceara and Rio Grande do Norte (90 MW in total capacity). The 35-year contracts were signed with the regulatory agency ANEEL starting in June 2010. The following special purpose companies were creates to handle the parks: Embuaca Geracao e Comercializacao de Energia S.A. (25.2 MW) Eolica Mar e Terra Geracao e Comercializacao de Energia S.A. (23.1 MW) Eolica Bela Vista Geracao e Comercializacao de Energia S.A. (27.3 MW) Eolica Icarai Geracao e Comercializacao de Energia Ltda. (14.4 MW) The projects initially belonged to the Portuguese group Martifer, which sold its shares to Santander Bank in October 2011. The total investment in the power plants was estimated at US$ 152.2 million (BRL 358.35 million). In July 2013, the state-owned bank BNDES approved a US$ 47.3 million (BRL 111.3 million) loan to finance the project. All special purpose companies signed power purchase agreements arranged with the state-owned company Eletrobras for 20 years through the Brazilian Federal program PROINFA (incentive program for alternative power generating companies) in 2009 and 2010. As of October 2011, construction works had not commenced, but the equipment had been acquired and the EPC contracts had been established. Due to the delays in the construction works, commercial operations were expected to commence only in 2013. The project companies were 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. Finally, the electricity sold by the company is not subject to sectoral taxes. In July 2012, the sponsor applied for carbon credits. In September 2012, construction works commenced. Commercial operations started in February 2014. In January 2014, the power plants EOL Embuaca and EOL Icarai were granted 2-year term loans arranged by Bradesco amounting to US$ 39.8 million (BRL 93.6 million). Commercial operations commenced in February 2014.