Ze Tunin Small Hydro Power Plant

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In July 2011, Pequena Central Hidreletrica Ze Tunin S.A., a wholly-owned subsidiary of the Brazilian company Energisa, was awarded the contract to build and operate a 8 MW hydro power plant located in the Paraiba do Sul River, state of Minas Gerais. The company signed a 30-year concession contract with ANEEL and the power plant was named PCH Ze Tunin. PCH Ze Tunin established a power purchase agreement to sell all its output to the electricity distribution network of Energisa Minas Gerais S.A. The sponsor committed to invest US$ 35.9 million (BRL 70 million) in the project. In December 2012, the sponsor was granted a US$ 20.4 million (BRL 39.9 million) loan from state-owned bank BNDES. The remaining cost was set to be financed with sponsor' internal resources. Construction works commenced in September 2011 and, by January 2013, the power plant started commercial operations. 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. In March 2015, Energisa sold its shares in the power plant to the Canadian group Brookfield.