The Brazilian Senate has approved the basic text of a bill allowing the privatisation of the state-owned power utility Eletrobras, following the approval of the lower house of Congress in late May 2021. The Senate version withdrew a requirement for auctions to buy electricity from gas-fired power plants as a counterpart to the privatisation, but it maintained a requirement to contract gas-fired power capacity in the North, Northeast and Midwest (requirement raised from 6 GW to 8 GW). It also extends subsidies for coal-fired power plants from 2027 to 2035.
Eletrobras has a production capacity of 51 GW, which represented 30% of the country's capacity (2019). The State controls 42.57% of Eletrobras directly and 19.12% indirectly (10.23% through BNESPAR, 5.92% through BNDES, the national development bank, and 2.97% through government funds). The government is expected to reduce its stake in the company to 45% through the sale of new share on the Brazilian stock exchange B3. The privatisation is expected to take place in 2022 and the government will retain a golden share. The privatisation plan excludes two Eletrobras affiliates: the Brazilian nuclear company Eletronuclear and its 50% stake in the 14 GW Itaipu hydropower plant shared with Paraguay. The measure, which must return to the Chamber of Deputies for final passage, is expected to raise around BRL25bn (nearly US$5bn). The proceeds should be used by the government to renew the company’s concessions for hydropower plants and transmission lines.
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