Sertao I and Sobral I Solar Power Plants

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The Spanish Gransolar Group was granted the authorization to build two solar power plants located in the state of Piaui, municipalities of Sao Joao do Piaui and Joao Costa (60 MW in total capacity). The 35-year contracts were signed with the regulatory agency ANEEL starting in March 2016. The company Gransolar Group created two special purpose companies to manage the projects: Sertao I Solar Energia SPE Ltda. - UFV Sertao I (30MW) Sobral I Solar Energia SPE Ltda. - UFV Sobral I (30MW) The total investment in the power plants was estimated at US$ 799.6 million (BRL 252.84 million), financed with the sponsor's equity. Construction works commenced in January 2017, and were expected to be concluded by 2017. As of June 2017, the construction works were in its final stages. In November 2016, Gransolar sold 85% of its shares in the project to Spanish company Gas Natural Fenosa, through its subsidiary Global Power Generation (GPG). The government periodically runs public bidding for the sale of energy to the country´s distribution companies. Sertao I and Sobral I won the public bidding that took place in August 2015 by offering an average tariff of US$ 91/MWh (BRL 303.5/MWh). The project companies signed 20-year power purchase agreements with the several electricity distribution companies. 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 accelerated depreciation methods of accounting for construction expenditures.