Ventos da Bahia Wind Park

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The Brazilian company VDB F2 Geracao de Energia S.A., a subsidiary of the French EDF EN do Brasil (EDF Energies Nouvelles), was granted the authorization to build four wind power plants located in the state of Bahia, municipality of Mulungu do Morro (116.6 MW in total capacity). The 35-year contracts were signed with the regulatory agency ANEEL starting in May 2016. The company created four special purpose companies to manage the projects: Ventos da Bahia I - Parque Eolico Ventos Da Bahia I S.A. (28.6 MW) Ventos da Bahia III – Parque Eolico Ventos Da Bahia III S.A. (30.8 MW) Ventos da Bahia IX – Parque Eolico Ventos Da Bahia IX S.A. (28.6 MW) Ventos da Bahia XVIII – Parque Eolico Ventos Da Bahia XVIII S.A. (28.6 MW) The total investment in the power plants was estimated at US$ 174 million (BRL 553 million). Financial closure was achieved in June 2017, when the project was granted a US$ 153 million (BRL 486.4 million) loan from the Brazilian bank BNDES. Construction works commenced in 2017 and were expected to be concluded by 2018. The government periodically runs public bidding for the sale of energy to the country´s distribution companies. Ventos da Bahia I, III, IX and XVIII won the public bidding that took place in November 2015 by offering an average tariff of US$ 64/MWh (BRL 203.96/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.