Public-Private Partnership Model for Developing Sustainable Hydroelectric Power Plants in Brazil

João da Rocha Lima Júnior; Claudio Tavares de Alencar; Sérgio Alfredo Rosa da Silva; Eliane Monetti

doi:10.15866/irece.v4i1.6847

Public-Private Partnership Model for Developing Sustainable Hydroelectric Power Plants in Brazil

João da Rocha Lima Júnior^(1*), Claudio Tavares de Alencar⁽²⁾, Sérgio Alfredo Rosa da Silva⁽³⁾, Eliane Monetti⁽⁴⁾

^(*) Corresponding author

Authors' affiliations

DOI: https://doi.org/10.15866/irece.v4i1.6847

Abstract

In this article, the Brazilian Model for Public-Private Partnership (PPP) is described. It was conceived envisaging investments for the completion of new electric sustainable power plants. The objective is to present the main drivers in Brazilian regulatory system for private investors in what relates to risks configuration and investment decision-making, either Brazilian or foreign ones. We analyzed the investment in 5 Brazilian power plants that altogether constitute an electric power-generating complex in Juruena River, in the state of Mato Grosso, in Brazil. According to the results, we can conclude that the present legal framework is able to support investment in small hydroelectric and sustainable power plants, considering the existence of Engineering Procurement Contracts (EPC) for the completion phase and of Power Purchase Agreements (PPA) for the operational phase as well.
Copyright © 2013 Praise Worthy Prize - All rights reserved.

Keywords

Public-Private Partnership; Electric Power Supply; Sustainable Hydro-Electric Power Plants; Brazilian Legislation

Full Text:

PDF

References

Brazil. Constituição da República Federativa do Brasil. Establishes rules for contracting public-private partnership by public administration. Law no 11,079, December 31th, 2004.

Brazil. Constituição da República Federativa do Brasil. Creates The Public-Private Partnership Committee. Law no 5,385, March 4th, 2005.

Alencar, C.T. Highway concessions in Brazil: an analysis towards the feasibility of the securitization. Journal of Financial Management of Property and Construction, Glasgow, UK, v.5., n.3, p.159-172, December, 2000.

Alencar, C.T. Derivation of Funds for Investments in Infrastructure Enterprises: The Securitization Feasibility in Highway Concessions and Independent Power Project Concessions in Brazil, Ph.D Thesis, Department of Civil Construction and Engineering, Polytechnic School, University of São Paulo. São Paulo, Brazil, 1998.

Goldenberg, J.; Mielnik, O. Electricity regulatory reform and sustainable development in Latin America. Energy for Sustainable Development. Bangalore, v.3, p.17-26, March, 1997.
http://dx.doi.org/10.1016/s0973-0826(08)60217-3

Mines and Energy Department. Power Sector Institutional Model. Brasília. Available in http://ucel.eln.gov.br/gse, 2003.

Faria, V.C.S. The Project Finance Role on Power Project Financing; The Case of Cana Brava Hydroelectric Power Plant. MSc. Thesis - COPPE, Federal University of Rio de Janeiro, Rio de Janeiro, Brazil, 2003.

Bonomi, C.A.;Malvessi, O. Project Finance in Brazil. (Atlas publishing, 2002, São Paulo).

Finnerty, J. D. Project Finance: Financial Engineering Based on Assets, (Nova York, 1996).

National Bank for Economic and Social Development. Long Term Interest Rate (LTIR). Rio de Janeiro. Available in http://www.bndes.gov.br, 2006.

Ariztía, R. Watts, D. The Electricity Crises of California, Brazil and Chile: Lessons to the Chilean Market. Proceedings of Lescope’2002, The 2002 Large Engineering Systems Conference On Power Engineering, p.7-12. Santiago, Chile, 2002.
http://dx.doi.org/10.1109/lescpe.2002.1020659

Borges, L. F. X. Covenants: Guarantee Instruments in Project Finance. Rio de Janeiro. National Bank for Economic and Social Development Review, v.6., n 11. p.117–136, 1999.

Montero, J.P.;Rudnick, H. Second generation electricity reforms in Latin Amarica and the California Paradigm. Journal of Industry, Competition and Trade, Holanda, n.2. p.159-172, 2002

Barroso, L.A.; Blanco, A.; RUDNICK, H. Twenty Years of Reestructing and Reform in Argentina, Brazil and Chile. IEEE Power & Energy Magazine, New York, p.50-59, july-agost, 2005.
http://dx.doi.org/10.1109/mpae.2005.1458230

Delloitte Touche Tomatsu Emerging Markets. Sustainable power sector reform in emerging markets: financial issues and options. Washington, D.C. Joint World Bank/USAID Policy Paper, 188p. June, 2004.

Hughes, W. T. Risk Analysis and Asset Valuation: A Monte Carlo Simulation Using Stochastic Rents. The Journal of Real Estate Finance and Economics. v.11, n.2, p.177-187, 1995.
http://dx.doi.org/10.1007/bf01098661

Rocha-Lima, J. Alencar, C.T. The Office Buildings Market in São Paulo: Time Cycles to Absorb Vacant Space and to Recover Investment Attractiveness According to the Brazilian Macroeconomic Performance. Journal of Financial Management of Property and Construction. v.11, n.1, p.59-71, 2006.
http://dx.doi.org/10.1108/13664380680001080

Aguiar, F.L.; Alencar, C. T. Risk Mitigation for the Private Power Projects Investors in Brazil – The Guarantees Structure. Proceedings of CIB W107. Construction in Developing Economies International Symposium “Construction in Developing Economies: New Issues and Challenges”, Santiago, Chile, 2006.

Rocha-Lima, J. Alencar, C.T. Foreign Investment and the Brazilian Real Estate Market. International Journal of Strategic Property Management. v.12, n.2, 109-123, 2008.
http://dx.doi.org/10.3846/1648-715x.2008.12.109-123

Refbacks

There are currently no refbacks.

Username
Password
Remember me