Ventos da Bahia Wind Farm - Phase I

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The German company Sowitec was granted the authorization to build three wind power plants located in the state of Bahia, municipality of Mulungu do Morro (72 MW in total capacity). The 35-year contracts were signed with the regulatory agency ANEEL starting in August 2014. The sponsor created three special purpose companies to manage the projects: Ventos da Bahia II – Parque Eolico Alto Do Bonito S.A. (30 MW) Ventos da Bahia IV – Parque Eolico Colina S.A. (12 MW) Ventos da Bahia VIII – Parque Eolico Boa Vista S.A. (30 MW) The total investment in the power plants was estimated at US$ 115.9 million (BRL 272.9 billion), financed with the sponsor's equity. Construction works commenced in September 2016, and were expected to be concluded by 2017. The government periodically runs public bidding for the sale of energy to the country´s distribution companies. Ventos da Bahia II, IV and VIII won the public bidding that took place in December 2013 by offering an average tariff of US$ 50/MWh (BRL 117,74/MWh). The project companies signed 20-year power purchase agreements with the several electricity distribution companies. In February 2015, Sowitec sold 80% of its shares in the project to the French company EDF EN do Brasil (EDF Energies Nouvelles). 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.