Light SA (LIGT3), the power distributor serving Rio de Janeiro, is seeking a new law that would allow it to continue developing a 150-megawatt hydroelectric project that the government wants to re-submit for auction along with other dam concessions granted at the start of the last decade.
Light will meet with the energy ministry this week to discuss ways it can retain ownership of the Itaocara project and sell the power from it in an auction, Light’s Director of Energy Evandro Vasconcelos said July 12 in a telephone interview.
The government wants to auction the concessions to eight hydroelectric projects, including the Itaocara venture, that were won in 2000-2004 and haven’t broken ground because of difficulties getting environmental licenses, Vasconcelos said. A law will have to be changed to allow Light to remain owner of the project’s concession and use the auction to sell its energy.
“We’re discussing with the government some way that we can start construction,” he said. “We’ve got all the licenses, we’ve agreed terms with local communities. If another company wins this concession they’ll have to do all this work again.”
Light is also seeking to reset the 35-year concession period of the project from 2001 when the utility won the rights to develop it on the Paraiba do Sul river, he said. The company planned to start building the project in September and auctioning it to another developer may push back construction by two years.
The government has offered developers including steelmaker Gerdau SA and mining company Vale SA (VALE) to hand back about 1,882 megawatts of projects for re-auctioning, Thais Prandini, executive director of Sao Paulo-based research company Thymos Energia, said today in a telephone interview.
Companies have until Aug. 9 to cancel their concessions and will be refunded costs of studying the projects, according to a Ministry of Mines and Energy regulation published today in Brazil’s official gazette.
A spokeswoman for Gerdau and spokesman for Vale declined to comment when contacted by Bloomberg News.
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