Brazil's TCU postpones decision on power utility Electrobras privatisation

The Brazilian Federal Court of Accounts (Tribunal de Contas da União, TCU), which is the country's federal accountability office, has postponed a decision on the privatisation of the state-owned power utility Eletrobras by up to 60 days, considering that the impact of the transaction on tariffs paid by electricity consumers was not clear. However, the government is authorised to keep working on the details of the proposed privatisation.

Eletrobras has a production capacity of 51 GW, which represents 28% of the country's capacity (2020). The Brazilian 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 from over 61% to 45% through the sale of new shares on the Brazilian stock exchange B3. In July 2021, the president signed into law the basic text of a bill allowing the privatisation of the company, following approvals of the text by the Chamber of Deputies in May 2021 and the Senate in June 2021. The privatisation is expected to take place in May 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 privatisation 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.