Brazil: Government Primed to Sell Eletrobras Assets Amid ‘World Cup Fever’

15 June 2018

Eletrobras informed that the distributors for sale comprise a total energy area of 2.4 million square kilometers or 29 percent of Brazil’s territory.

While Brazilians and the world are focused on the 2018 FIFA World Cup, the country’s government has announced more details about the plans, which will lead to the eventual privatization of Eletrobras, Brazil and Latin America’s largest power utility company. The Ministry of Mines and Energy, or MME, has said six Eletrobras distributors, located in the country’s northern and northeastern regions, are slated to be auctioned in July.

The assets include: Eletrobras Acre Distribution (Eletroacre); Eletrobras Alagoas Distribution (CEAL); Eletrobras Amazonas Distribution (Amazonas Energia); Eletrobras Piaui Distribution (Cepisa); Eletrobras Rondonia Distribution (Ceron); and Eletrobras Roraima Distribution (Boa Vista).

“The privatization process of our distributors are part of the Partnerships and Investments Program (PPI), with the objective of strengthening the coordination of investment politics in infrastructure through partnerships with the private sector,” the state company noted in an official website. “Privatization will enable a new stockholder who specializes in energy distribution to optimize the company’s resources and undertake needed investments to make it more efficient.”

Eletrobras also announced that it aims to sell 59 wind generation SPCs, along with 11 energy transmission SPCs, with a total estimated book value of 2.5bn reais (US$700 million) as a part of the sale of assets.

The distributors, who cover an area of 2.4 million square kilometers or about 30 percent of Brazil’s territory, manage most of the power for the northern states of Roraima, Amazonas, Piauí, Alagoas, Rondônia, and Acre.

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Eletrobras workers associated with the National Federation of Urban Utilities (UNF) and National Electricity Collective (CNE) have, however, announced that they would vigorously oppose the move. The groups approved a 72-strike beginning June 25, in the event the state-owned energy company doesn’t make progress in salary negotiations and guarantee job security, according to Business Insider.

Brazilian president Michel Temer and his administration, many of whom have been implicated in corruption scandals, are preparing a privatization package that could net US$28 billion dollars by the end of 2018.

The package, which has been detailed by the federal government’s infrastructure team, according to Poder360, includes the privatization of airports, oil blocks, hydropower plants and other strategic, government-owned entities.

Economic and political uncertainty in the South American country has contributed to the waning of its population’s love for football and the World Cup. A recent survey by Datafolha earlier this week revealed 53 percent of citizens said they weren’t interested in the tournament, women, and persons between the ages of 35 and 44 ranking among the most apathetic in the poll. While persons belonging to families, who earn less than US $510 per month also expressed a lack of interest in the competition that the South American country has won five times.

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