Vale do Sao Simao Thermal Power Plant

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The Brazilian company Companhia Energetica do Vale do Sao Simao, a wholly-owned subsidiary of Grupo Andrade, was granted an authorization to build a 55-MW thermal power plant located in the state of Minas Gerais (municipality of Santa Vitoria) in February 2009. The cogeneration power plant was set to use sugar cane residues resulting from the ethanol producing unit belonging to the same company as fuel. Companhia Energetica do Vale do Sao Simao signed a 35-year contract with the regulatory agency ANEEL allowing the company to operate in the electricity market as a independent producer. This authorization granted the sponsor with the right to sell electricity in the Brazilian wholesale market. In , the company took part in a competitive bidding process to sell electricity to the regulated wholesale market (15-year power purchase agreement was signed guaranteeing the sale of electricity to the national grid). Of the 55 MW of electricity produced, 15 MW would be set aside for the ethanol producing unit consumption, while 25 MW was the capacity committed to the referred power purchase agreement. Companhia Energetica do Vale do Sao Simao committed to invest US$ 31.5 million (BRL 63 million) in the facility. In November 2009, the company was granted a US$ 76.93 million (BRL 153.86 million) syndicated loan contract from BNDES, a state-owned development bank. The resources from the loan was directed both to the construction of the ethanol producing unit and the cogeneration facility. Construction works on this plant were concluded in April 2010, but commercial operation commenced only in October 2010.