The Brazilian government plans to partly privatize Eletrobras (Brazil)

23 Aug 2017

The Brazilian Ministry of Mines and Energy has initiated plans to privatize part of its majority stake in the state-controlled utility Eletrobras. The company's total value is now estimated at R$20bn (around US$6.3bn) and the government could sell up to R$12bn (US$3.8bn) but nothing concrete came out so far. The privatization model and terms are yet to be decided but the government could keep a right to veto some strategic decisions. The rationale behind the sale is to reduce the country's budget deficit and avert another debt rating downgrade.

As of today, the Federal government controls 51% of Eletrobras' voting shares and 40.99% of its capital. The company has a power generating capacity of 46.8 GW, which represents around 31% of the country's capacity (as of 2016) and in particular a 50% stake (7 GW) in Itaipu Binacional, the company operating the Itaipu hydropower plant. The company currently has nearly 13 GW under construction. Besides, it operates about half of the country's transmission network (about 70,200 km of transmission lines). As of 2017, the company had a debt load amounting US$14.7bn.

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