Sete Lagoas Transmissora de Energia

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In December 2010, the Spanish company Cobra Instalaciones y Servicios S.A. was awarded in a competitive bidding process the contract to build and operate one substation located in the state of Minas Gerais. The substation was named SE Sete Lagoas 4, with planned capacity of 345/138 kV. Besides Cobra Instalaciones y Servicios S.A., five other companies took part in the contest: Consorcio Caldas Novas; CTEEP- Companhia de Transmissao de Energia Eletrica Paulista; TAESA- Transmissora Alianca de Energia Eletrica S.A.; Consorcio Empresarial Sete Lagoas; and ATP Engenharia Ltda. The bidding criteria set by the regulatory agency ANEEL was the lowest required annual revenue. Cobra Instalaciones presented the lowest offer: a value of US$ 1.9 million (BRL 3.876 million), 45.08% below the ceiling set by the regulatory agency. The contract was signed in June 2011, and the sponsors created the company Sete Lagoas Transmissora de Energia Ltda to lead the project during the 30-year contract period. The sponsor committed to invest US$ 42.3 million (BRL 99.50 million) in the substation. In August 2014, the sponsor was granted a US$ 10.4 million (BRL 24.35 million) loan from state-owned bank BNDES. Environmental clearance was awarded in June 2011, and the construction works commenced right away. Commercial operations started in June 2014. 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.