Vila Acre I Wind Power Plant

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The French Volatalia was granted the authorization to build a wind power plant located in the state of Rio Grande do Norte, municipality of Serra do Mel (27.3 MW in total capacity). The 35-year contract was signed with the regulatory agency ANEEL in April 2016. The company created the following special purpose companies to manage the project: USINA DE ENERGIA EOLICA VILA ACRE I S.A – EOL Vila Acre I (27,3MW) The total investment in the power plant was estimated at US$ 31.7 million (BRL 100.8 million), financed with the sponsor's equity. Construction works commenced in January 2017, and were nearly concluded by June2017. The government periodically runs public bidding for the sale of energy to the country´s distribution companies. Vila Acre I won the public bidding that took place in November 2015 by offering an average tariff of US$ 59/MWh (BRL 210.98/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.