The Brazilian President has signed a bill to privatise state-owned power company Eletrobras in the second half of 2020. The bill will have to be approved by the Chamber of Deputies and the Senate, since the Supreme Federal Court has prohibited the privatisation of state-owned companies without the approval of the Congress. The privatisation would be carried out through a capital increase, reducing the share of the State to less than 50% and its voting rights to less than 10%. The bill no longer foresees maintaining a golden share for the State that would enable the government to veto decisions, which could spark opposition in the Congress. Eletrobras would use the proceeds from the privatisation to pay BRL16.2bn (US$4bn) to the State for the removal of its hydropower plants from the so-called quota regime, BRL8bn (US$2bn) to reduce electricity bill subsidies (this money should be invested in the Energy Development Account) and BRL3.5bn (US$880m) for the revitalization of the São Francisco River.
In January 2019, the Brazilian Secretary of Privatisation announced plans to privatise Centrais Eletricas Brasileiras, a subsidiary of Eletrobras, by selling additional shares on the market to raise capital. According to the Secretary of Privatisation, the government does not have enough resources to capitalise the company and in particular its power generation and transmission assets, which are viewed as capital-intensive. Eletrobras would issue between BRL 30bn and BRL 36bn (US$8-9bn) in new shares, diluting the government's stake in the company to a minority holding.