Spanish Companies Dominate Brazil Power Line Auction

Spanish companies Abengoa SA (ABG) and ACS Actividades de Construccion & Servicios SA were the biggest winners in an auction of Brazilian power projects, picking up two blocks each to build and operate transmission lines.

ACS, through its Cymi unit, was the most aggressive bidder, accepting discounts of 36 percent and 23 percent on the government’s annual revenue ceiling for power lines in northeastern states, regulator Aneel said today on its website.

Abengoa won the most sought after block, outbidding Brazil’s state-run Centrais Eletricas Brasileiras SA (ELET3) for projects in the Amazon region. The Seville-based company was the sole bidder for a project in northern Brazil’s Para state. Cia Paranaense de Energia won two blocks to build lines in its home state of Parana while Consorcio Cantareira and Alupar Investimento SA (ALUP11) picked up one project each.

While the regulator estimated the auction would generate investments of 4.3 billion reais ($1.9 billion), five blocks failed to attract any bids. President Dilma Rousseff’s government is attempting to increase security and efficiency in a power system beset by supply interruptions and growing risk of rationing this year.

Brazil has had its worst drought in decades, reducing reservoir levels to their lowest since the country rationed power in 2001 and prompting record thermo generation.

To contact the reporter on this story: Mario Sergio Lima in Brasilia Newsroom at mlima11@bloomberg.net

To contact the editors responsible for this story: James Attwood at jattwood3@bloomberg.net Robin Saponar

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