Eletrobras

Eletrobras (full name: Centrais Elétricas Brasileiras S.A.) is a major Brazilian electric utilities company. The company's headquarters are located in Rio de Janeiro.
It is Latin America's biggest power utility company, tenth largest in the world, and is also the fourth largest clean energy company in the world. Eletrobras holds stakes in a number of Brazilian electric companies, so that it generates about 40% and transmits 69% of Brazil's electric supply. The company's generating capacity is about 51,000 MW, mostly in hydroelectric plants. The Brazilian federal government owned 52% stake in Eletrobras until June 2022, the rest of the shares traded on B3. The stock is part of the Ibovespa index. It is also traded on the Nasdaq Stock Market and on the Madrid Stock Exchange.
History
Eletrobras was established in 1962 during João Goulart's presidency.
Operations
Eletrobras is an electric power holding company. It is the largest generation and transmission company in Brazil. Through its subsidiaries it owns about 40% of Brazil's generation capacities and controls 69% of the National Interconnected System.
Eletrobras stands as the biggest company of the electric power sector in Latin America.
Subsidiaries
Among Eletrobras' subsidiaries, there are generation and transmission companies.
Eletronorte (Centrais Elétricas do Norte do Brasil S.A.) is responsible for the power generation, transmission and distribution in the states of Amazonas, Pará, Acre, Rondônia, Roraima, Amapá, Tocantins and Mato Grosso.
Eletrobras Eletropar acts in participations of other energy companies.
Eletronet - 49.27%
CESP - 4.77%
EMAE - Empresa Metropolitana de Águas e Energia - 1.42%
AES Eletropaulo - 2.03%
CPFL Energia - 1.15%
CTEEP - 0.66%
Energias de Portugal - 3.09%
Itaipu Binacional - 50.00%
CHESF (Companhia Hidro-Elétrica do São Francisco; São Francisco's Hydroelectric Company) generates and transmits electric power from hydroelectric plants to all of the cities in northeast of Brazil. It owns 14 hydroelectric energy plants and 1 thermoelectric energy plant. Sinval Zaidan Gama was made CEO in January 2017.
The main source of energy is the São Francisco River.
Eletrobras CGTEE was a Brazilian power company created on 11 July 1997. It is active in the state of Rio Grande do Sul.
Eletrobras Cepel
Eletrobras Eletronuclear
Eletrobras Eletrosul
Eletrobras Furnas
Itaipu Binacional
International activities
Eletrobras was authorized by Act 11.651, sanctioned on 7 April 2008, to operate abroad as an investor in the power sector, by means of consortiums and/or specific purposes companies; it may also have control on enterprises. In order to coordinate this operation, it was created the Superintendence of Operations Abroad, which will operate following the guidelines of its board of directors.
For this first period, the Superintendence of Operations Abroad has set forth the priorities as follows:
Interconnect new sources of energy in Latin America with the Brazilian power system;
Promote the energetic integration between Brazil and the countries of Latin America; and
Prospect opportunities for investment in power energy in other countries to benefit the Brazilian economy by generating new markets for the goods and services suppliers segment.
The Superintendence of Operations Abroad has been developing negotiations with several countries in Latin America and Africa:
Angola and Namibia – Feasibility Studies of the AHE from Baynes, located in the Cunene River, in the border between the two countries;
Argentina – AHE Binacional de Garabi;
Costa Rica – Technical Cooperation Agreement under analysis;
Nicaragua – Appraisal of AHEs from Boboke and Tumarim;
Peru – Analysis of feasibility for use of 15 AHEs, totalizing 20,000 MW;
Uruguay - New transmission lines expanding the already existing electric interconnection between the southern part of Brazil and Uruguay;
Venezuela – Studies for interconnection with the purpose of having an electric interchange between the two countries.
With Bolivia, Colombia, China, Ecuador, El Salvador, Guinea Bissau, Guyana, Morocco and Nigeria the contacts are in their initial phase.
List of current and former CEOs
Privatization in 2022
In May 2021, the Câmara dos Deputados approved a Provisional Measure (MP), sent by the Bolsonaro Government, that foresees the privatization of Eletrobras. The process would take place through the sale of new ordinary shares on the B3 Stock Exchange, which in practice would decrease the shareholding interest of the government and the Brazilian Development Bank (BNDES) to about 45%, with more papers offered to private investors. Where each shareholder, individually, could not hold more than 10% of the voting capital of the company. The Government would maintain a special class of share (golden share) that grants it veto power in decisions of the shareholders' meeting. The MP was approved in the Senate Plenary, on 17 June 2021, with the presentation of three different opinions by the rapporteur, Senator Marcos Rogério (DEM-RO). The dispute was reflected in the result of the vote: the MP received 42 votes in favor and 37 against.
Privatization advocates argue that once privatized the company would increase its investment capacity. However it was criticized by other sectors of society, such as the Union Movement for Energy, Instituto de Energia e Meio Ambiente (IEMA), and the Federação das Indústrias do Estado de São Paulo (FIESP), fearing that the project could lead to increased tariffs for consumers and cause environmental damage. The main concerns about the privatization were amendments requiring the contracting of thermoelectric plants powered by natural gas and the authorization to build the Tucuruí transmission line without the need for environmental permits from the Instituto Brasileiro do Meio Ambiente e dos Recursos Naturais Renováveis (IBAMA) and the Fundação Nacional do Índio (FUNAI).
The final version of the project was approved on 21 June 2021. The final proposal extends contracts of the PROINFA for 20 years, provides for the construction of SHPs, and forbids, for ten years, that subsidiaries of Eletrobras are extinguished. The MP also determines revitalization projects in the Bacia do rio São Francisco, the Furnas reservoirs, in the Amazonia, Madeira River and Tocantins River. Also, Eletronuclear, responsible for the Usina Nuclear de Angra, and the Brazilian participation in the Itaipu Dam will be dismembered from Eletrobras and kept under state control.
In July 2021, Bolsonaro sanctioned the Provisional Measure for the privatization of Eletrobras. According to government accounts the privatization would reduce the electricity bill by about 7.36%. On the other hand, entities in the sector said that the electricity bill will become more expensive with the privatization.
The focus of the privatization is to sell shares until the government ceases to own 60% of the shares and owns 45% of the company, thus losing the majority stake in the company.
In September 2021, the Empresa Brasileira de Participações em Energia Nuclear e Binacional (ENBPar) was created, with the objective of taking over Eletrobras activities that cannot be privatized, such as the Itaipu Binacional and Eletronuclear companies (Angra 1, 2 and 3 plants) and the management of public policies, under law 14.182/2021.
On 14 June 2022, 802.1 million shares were sold, with a base price of R$42 (US$8.56), in an operation that moved R$33.7 billion (US$6.9 billion). With this, the Union's stake in the voting capital of the state company was reduced from 68.6% to 40.3%.
Major shareholders include GIC Private Limited, the Canada Pension Plan Investment Board (CPPIB), and the Brazilian manager 3G Radar, linked to 3G Capital.
Employees and retirees of Eletrobras and its subsidiaries had priority to acquire up to 10% of the total shares offered. It was also authorized that workers could buy company shares using up to 50% of the balance of the FGTS.
References
External links
Electric power companies of Brazil
Companies based in Rio de Janeiro (city)
Energy companies established in 1962
Brazilian companies established in 1962
Companies listed on B3 (stock exchange)
Companies listed on the Madrid Stock Exchange
Companies listed on the Nasdaq