(Agencia CMA Latam) – The Brazilian government expects to complete the privatization of the power company Eletrobras by the middle of 2018, and the asset sale process will involve all the power plants currently operated by the firm, except for Itaipu and Angra, said the Minister of Mines and Energy, Fernando Coelho Filho, during a teleconference.
“We know that time is short and poses a big challenge, but our idea is to be able to complete [the privatization process] by the end of the first half of 2018,” the minister said, adding that the government should release more details about its plans in the next weeks.
According to him, the Brazilian government wants Eletrobras to bid for new concession contracts for some power plants it already operates. The new contracts would allow the company to set higher prices for electricity in those power plants.
Currently, some of Eletrobras’ power plants operate under a particular regulatory framework in which payments amount only to the company’s operating and maintenance costs. The price of the energy is lower than market prices under that scheme, but the company is exempt from some regulatory fees.
Eletrobras would have the right to choose whether to keep the plants under the new regime and would pay the government for the rule change. The company, however, would have to raise money for that transaction issuing new stocks.
“Once it can not afford [the payments for the new contracts], the idea is to raise money in the stock market,” the minister said, adding that the new shares should cut the government’s stake in Eletrobras from 63% to less than 50%.
Coelho Filho added that the government does not intend to sell the shares it already owns at Eletrobras.
“If [the Eletrobras share offer] is not sufficient to dilute the government [stake], then we can analyze the sale of a portion of the shares,” the minister added.
He also said that Itaipu and Angra power plants should not be involved in the process, as Paraguay operates Itaipu jointly with Brazil, while Angra nuclear power plants are constitutionally required to remain in the public sector.
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