Serra das Agulhas Small Hydro Power Plant

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The Brazilian company Sigma Energia S.A., a subsidiary of Omega Energia e Implantacao 1 S.A., was granted an authorization to build a 28-MW hydro power plant located in the state of Minas Gerais (municipalities of Monjolos and Diamantina). The power plant was named PCH Serra das Agulhas. In July 2013, the company signed a 30-year contract with the regulatory agency ANEEL allowing the company to build and operate the power plant. In December of the same year, the company took part in a bidding process to establish 30-year power purchase agreements with electricity distribution companies; the company won the contracts by offering the tariff of US$ 57.4/MWh (BRL 134.9 /MWh). The company committed to commence operations by the end 2016. The investment commitment was estimated at US$ 53.5 million (BRL 125.66 million). In November 2014, the company was granted a US$ 13 million (BRL 30.66 million) loan contract from BNDES, a state-owned development bank. By August 2015, BNDES granted additional financing of US$ 29 million (BRL 96.6 million). The company 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 accelated depreciation methods of accounting for construction expenditures. In October 2011, the company applied for carbon credits.