Serra Azul Wind Park

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Enel Green Power Dois Riachos Eolica S.A., Enel Green Power Damascena Eolica S.A., and Enel Green Power Manicoba Eolica S.A., subsidiaries of the Italian company Enel Green Power, were granted authorizations to build three wind power plants located in the municipality of Cafarnaum, state of Bahia (90 MW in total capacity). The power plants were named EOL Dois Riachos, EOL Damascena and EOL Manicoba, each with 30 MW in capacity. The 35-year contracts were signed with the regulatory agency ANEEL starting in May 2013. The total investment in the power plants was estimated at US$ 142 million (BRL 422.7 million). The government periodically runs public bidding for the sale of energy to the country´s distribution companies. The power plants controlled by Enel won the public bidding that took place in December 2012 and August 2013 by offering an average tariff of US$ 30 /MWh (BRL 89,20/MWh) and US$ 33.8 /MWh (BRL 100,60/MWh), respectively. The project companies signed 20 -year power purchase agreements with the several electricity distribution companies. The companies committed to start supplying to the market in 2015 (EOL Damascena and EOL Manicoba) and in 2017 (EOL Dois Riachos). In December 2013, the IFC approved a US$ 220 million A-loan to finance five of Enel's wind parks in Brazil: Modelo, Serra Azul, Fonte dos Ventos, Cristal and Curva dos Ventos. Information on how much of this funding was directed to each project was not released. Construction works commenced in September 2015, and were in its final stages by June 2015. In December 2015, the state-owned bank BNDES approved a loan of US$ 41.6 million (BRL 138.7 million). The projects 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. Finally, the electricity sold by the company is not subject to sector taxes. In January 2012, the company applied for carbon credits. In February 2016, the project companies issued US$ 16.6 million in long-term bonds to refinance previous debts.