Brazil
PCH Figueirópolis and Ludesa
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Project Overview

  • PCH Figueirópolis is a 20-MW small hydroelectric plant.
  • PCH Ludesa is a 30-MW small hydroelectric plant.

Public-Private Participants

  • Public Sector: Eletrobrás
    • A major Brazilian electric utility Latin America’s largest electric utility company; tenth largest in the world and also the fourth-largest clean energy company in the world.
    • The Brazilian federal government owns 52% of the stock of Eletrobrás.
  • Private Sector:
    • Companhia Hidroelétria Figueirópolis S.A.
    • Ludesa Energética S.A.

Lessons Learned

Energy Policies

  • Energy policies strongly affect the project decision-making because they can have a significant impact on the project’s Internal Rate of Return (IRR).
  • No new energy policies were established to facilitate the project.

Financing

  • The project partners used a long-term financing approach with the Development Bank. Specifically in the Figueirópolis project, the partners utilized Banco do Brasil by means of the Mid-West Constitutional Financing Fund, or Fundo Constitucional de Financiamento do Centro- Oeste (FCO). FCO is an important instrument used to assist businesses within the midwest region of the country in generating social and economic development.
  • The Public-Private Partners provided the financing entity with energy purchase guarantees under the Brazilian Government’s PROINFA (Programme of Incentives for Alternative Energy Sources) incentive program. PROINFA, administered by the national power utility Eletrobrás, encourages the development of renewables (wind, biomass and small hydroelectric plants) by offering longterm contracts for the electricity generated.

Replicability

  • If the PROINFA incentives are retained, the projects can be replicated.
  • The incentives are required to sustain an attractive electrical energy price.

Long-Term Policy Framework

  • We believe that such partnerships can influence longterm policy framework. Private participants can influence the policy debate by engaging with their trade associations on a regional scale and taking part in association discussions and activities surrounding this theme.
  • The investment in this type of enterprise is dependent on incentive programs like PROINFA to provide long-term contracts and attractive financial compensation.

Conclusions

Organizations like e8 are, and will be, very important if they can influence country and/or regional governments to develop laws, norms and programs to stimulate publicprivate partnership. These organizatons can also work towards creating a more liquid market to trade carbon credits.

For More Information Contact:

Newton Shuiti Narahara
Companhia Hidroelétria Figueirópolis S.A.
Ludesa Energética S.A.
Phone: (55) – (41) 3310-9900

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