Sao Jose Hydro Power Plant

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In December 2005, the Brazilian company Alupar Investimento was awarded in a competitive bidding process organized by the federal regulatory agency Aneel the 35-year contract to build and operate a 51-MW hydro power plant located in the Ijui River, state of Rio Grande do Sul. Besides Alupar, two other Brazilian companies took part in the bidding contest: Fuad Rassi and state-owned Eletrosul. The bidding criteria set by the federal regulatory agency ANEEL was the lowest tariff. The company also agreed to pay US$ 0.085 million (BRL 0.155 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$ 24 million). The contract was signed in July 2006, and sponsors created the company Ijui Energia to lead the project during the 35-year contract period. All the electricity produced was set to be sold to distribution companies. In September 2008, the state-owned investment fund FI-FGTS acquired 49.99% of the project company's shares. The sponsor committed to invest US$ 184.5 million (BRL 337.6 million) in the power plant. Financial closure was achieved in April 2008, when the sponsor was granted a US$ 91.9 million (BRL 168.2 million) loan from BNDES. The remaining cost was financed with the sponsors’ internal resources. Construction works started in September 2007, and operations commenced in March 2011.