Ventos do Araripe III Wind Farm

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The Brazilian investment fund Salus Fundo de Investimentos e Participacoes was granted authorizations to build wind parks located in the states of Piaui and Pernambuco (366 MW in total capacity). The 35-year contracts were signed with the regulatory agency ANEEL starting in September 2014. The following special purpose companies were created to manage each plant: * Ventos de Santo Augusto I (Energias Renovaveis S.A. – EOL Ventos de Santo Augusto I (16 MW) * Ventos de Santo Augusto II Energias Renovaveis S.A. – EOL Ventos de Santo Augusto II (30 MW) * Ventos de Santo Augusto VI Energias Renovaveis S.A. – EOL Ventos de Santo Augusto VI (30 MW) * Ventos de Santo Augusto VII Energias Renovaveis S.A. – EOL Ventos de Santo Augusto VII (16 MW) * Ventos de Santo Augusto VIII Energias Renovaveis S.A. – EOL Ventos de Santo Augusto VIII (16 MW) * Ventos de Santo Estevao I Energias Renovaveis S.A. – EOL Ventos de Santo Estevao I (30 MW) * Ventos de Santo Estevao II Energias Renovaveis S.A. – EOL Ventos de Santo Estevao II (30 MW) * Ventos de Santo Estevao III Energias Renovaveis S.A. – EOL Ventos de Santo Estevao III (30 MW) * Ventos de Santo Estevao III Energias Renovaveis S.A. – EOL Ventos de Santo Estevao IV (30 MW) * Ventos de Santo Estevao V Energias Renovaveis S.A. – EOL Ventos de Santo Estevao V (30 MW) * Ventos de Sao Virgilio 01 Energias Renovaveis S.A. – EOL Ventos de Sao Virgilio 01 (30 MW) * Ventos de Sao Virgilio 02 Energias Renovaveis S.A. – EOL Ventos de Sao Virgilio 02 (30 MW) * Ventos de Sao Virgilio 03 Energias Renovaveis S.A. – EOL Ventos de Sao Virgilio 03 (18 MW) * Ventos de Santo Onofre IV Energias Renovaveis S.A. – EOL Ventos de Santo Onofre IV (30 MW) The total investment in the power plants of the wind complex was estimated at US$ 499.7 million (BRL 1743 million). In December 2016, the state-owned development bank BNDES approved a US$ 299 million (BRL 1043 million) loan to the project. The remaining cost was equity financed. The government periodically runs public bidding for the sale of energy to the country´s distribution companies. The power plants controlled by Salus won the public biddings that took place in 2014 and 2015, by offering an average tariff of US$ 51.5/MWh (BRL 121/MWh). The project companies signed 20-year power purchase agreements with the several electricity distribution companies. The project 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.