Serra Paracatu Transmissora de Energia

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In December 2006, Isolux SA was awarded in a competitive bidding process organized by the regulatory agency ANEEL the contract to build and operate a 246-km transmission line and two substations located in the state of Minas Gerais (Paracatu and Pirapora). Besides Isolux SA, eight other companies took part in the contest, though only two participated in the final stage of the process: Abengoa SA and Isolux SA. The bidding criteria set by ANEEL was the lowest required annual revenue. Isolux SA presented the lowest offer, a total value of US$ 8 million (BRL 17 million), which was 59.4% below the ceiling set by the regulatory agency. The contract was signed in May 2007, and the sponsors created the company Serra Paracatu Transmissora de Energia Ltda to lead the project during the 30-year contract period. The sponsor committed to invest US$ 129.5 million (BRL 237 million) in the transmission line. The construction works commenced in May 2008, but financial closure was only achieved in August 2008, when the sponsor was granted a US$ 56.8 million (BRL 104.1 million) loan from BNDES. The remaining cost was set to be financed with the sponsors’ internal resources. Construction works were concluded in April 2009. In March 2010, the shareholding structure was modified when a Chinese state – owned company, SGID, acquired Serra Paracatu Transmissora de Energia and other transmission projects from Plena Transmissora de Energia (Isolux, 33,3%; Elecnor, 33,3%; Cobra Instalaciones y Servicios, 33,3%), which held 100% of the shares of the project company at the time the transaction took place. SGID invested US$ 1.72 billion (BRL 3.1 billion) in the acquisition of Plena Transmissora de Energia.