Sunday, February 9, 2014

Brazil: Chinese-Brazilian Consortium Electrical Infrastructure at Belo Monte Dam

According to The Latin American Tribune, a Sino-Brazilian consortium has been awarded the rights to build and operate a transmission line connecting the massive Belo Monte Amazon dam to southeastern Brazil.

IE Belo Monte, which China’s State Grid Corp. leads with a 51% stake and also includes Brazil’s Furnas (24.5%) and Eletronorte (24.5%), units of state-owned electric utility Eletrobras, prevailed in Friday’s auction held at the São Paulo Stock Exchange.

The winning group beat out two other competitors by proposing a lower revenue take, Brazil’s utility regulator, Aneel, said in a statement.

IE Belo Monte offered to limit its annual revenue to 434.6 million reais ($182.2 million), 38% less than the 701-million-real ($294.1 million) ceiling established by the government.

COMMENT: The government and environmentalists have fought a legal dispute that has often stalled the construction of the massive dam, which will have an average generating capacity of 4.6 GW and a maximum capacity of 11.2 GW when the Xingu River, in the northern state of Para, is at its highest level.

IE Belo Monte has 46 months after the contract is signed to build and start operating the transmission line.

Some 5 billion reais ($2.1 billion) will need to be invested in the power-line project, which will create nearly 15,500 jobs over the 30-year life of the contract, according to Aneel’s estimates.

Belo Monte, which is to be the world’s third-largest hydroelectric power plant, has faced staunch opposition from environmentalists concerned about its impact on the Amazon and from local Indians, farmers and fishermen worried about its effect on their livelihoods.