Santelisa Vale Bioenergia

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The Brazilian company Santelisa Vale Bioenergia was granted authorizations to build and operate two thermal power plants located in the state of Sao Paulo (municipalities of Sertaozinho and Morro Agudo). Santaelisa Vale Bionergia was established as an association of two sugar-cane pressing units: Usina Santa Elisa (Biagi Group), with an authorized generation capacity of 48 MW (increased to 73 MW in 2003); and Usina Vale do Rosario, with an authorized generation capacity of 43 MW. The cogeneration power plants were set to use sugar cane residues resulting from the ethanol producing unit belonging to the same company as fuel. The 30-year contracts were signed with the regulatory agency ANEEL in July 2001 and September 2002, allowing the power plants to operate in the electricity market as independent producers. The investment on the Santa Elisa unit was estimated at US$ 18.7 million (BRL 44 million), 80% of which was financed by the BNDES. The loan was approved in December 2001, and the power plant commenced operations in 2003. Santa Elisa signed a 12-year power purchase agreement with the electricity distribution company CPFL. Vale do Rosario power plant was initially established as a captive unit, and the power plant went through a three stage expansion plan prior to receiving the authorization to sell electricity to the national grid in 2002. The investment on the Vale do Rosario unit, which was directed to the initial construction and to the expansion works was implemented with the following schedule: US$ 3.1 million in 1994; US$ 10.9 million in 1997; US$ 3.7 million in 2001; and US$ 17.3 million in 2005. In November 2007, the Brazilian state-owned bank BNDES channeled resources amounting to US$ 550 million in exchange for a 25% stake in Santaelisa Vale Bioenergia. This funding was directed to improving the company’s financial situation. As a result, the company shareholding structure changed such that Biagi Group held a 50% stake, Vale do Rosario, 25%, and BNDES, 25%. In October 2009, LDC Bioenergia, a subsidiary of the American company Louis Dreyfus Commodities, acquired a 60% stake in Santelisa Vale Bioenergia. The operation involved the establishment of a new company, LDC-SEV, to manage the assets of LDC Bioenergia and Santelisa Vale Bioenergia. LDC-SEV became one of the largest companies operating in the business of sugar-cane processing, production of ethanol, and electricity generation.