The new law opens public service concessions to bidding process involving the private sector. Present distribution concessions for new plants will be granted after tender processes. In general terms privatization in the Brazilian electric power sector is expected to lead to renewed investment and significant improvement in efficiency levels. Privatization in the electricity sector in Brazil is likely to come in different forms. Indirect privatization includes, for example, the cancellation and re-tendering of existing generation concessions, the creation of IPPs and the opening to competition of the market for supplying large electricity users.
Direct privatization involves the state of controlling share holding in state companies.
The first direct privatization was promoted by the federal government last July.