Serra da Babilonia Wind Park

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The Brazilian company Copacabana Geracao de Energia e Participacoes S.A., a subsidiary of Rio Energy Fundo de Investimento em Participacoes, was granted the authorization to build eight wind power plants located in the state of Bahia, municipalities of Morro do Chapeu and Varzea Nova (223 MW in total capacity). The 35-year contracts were signed with the regulatory agency ANEEL starting in May 2016. The company created eight special purpose companies to manage the projects: Eólica Serra da Babilônia II S.A - Serra da Babilônia II (28.2 MW) Eólica Serra da Babilônia VI S.A - Serra da Babilônia VI (25.85 MW) Eólica Serra da Babilônia VII S.A - Serra da Babilônia VII (28.2 MW) Eólica Serra da Babilônia VIII S.A - Serra da Babilônia VIII (28.2 MW) Eólica Serra da Babilônia IX S.A - Serra da Babilônia IX (26 MW) Eólica Serra da Babilônia X S.A - Serra da Babilônia X (28.2 MW) Eólica Serra da Babilônia XI S.A - Serra da Babilônia XI (28.2 MW) Eólica Serra da Babilônia XII S.A - Serra da Babilônia XII (28.2 MW) The total investment in the power plants was estimated at US$ 409 million (BRL 1,3 billion). Financial closure was achieved in March 2017, when the sponsor was granted a US$ 266.8 million (BRL 848 million) loan from the Brazilian bank BNDES. Construction works commenced in April 2017 and were expected to be concluded by November 2018. The government periodically runs public bidding for the sale of energy to the country´s distribution companies. Rio Energy won the public bidding that took place in November 2015 by offering an average tariff of US$ 65/MWh (BRL 206.48/MWh). The project companies signed 20-year power purchase agreements with the several electricity distribution companies. The sponsor 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.