São Paulo – Eletrobras, a Brazilian electric power generation, transmission and distribution company, is looking into developing projects abroad. The most advanced studies are underway in Peru, Mozambique and Nicaragua, but there are also talks regarding possibilities in Arab countries. The head of the Division for Management of Information on New Foreign Businesses, Antonio Augusto Gonçalves, participated in a mission of the Brazilian Ministry of Development, Industry and Foreign Trade this month, and received an inquiry concerning participating in an electric power generation project in Egypt.
"Every country is a market," says Gonçalves, on the interest of Eletrobras in the Arab world. In addition to new projects, the company’s internationalization strategy comprises purchases of stakes in already operating generation plants or systems. In Peru, Eletrobras is conducting studies for a hydraulic power generation project in the Inambari district. In this case, there is a possibility of bringing the energy generated to Brazil, which makes the project more attractive to Eletrobras. In Mozambique, studies concern participation in transmission systems, and in Nicaragua, power generation.
Other projects are being analyzed, but, according to to Gonçalves, all are still being considered. In order to make its situation abroad easier, Eletrobras established an office in Lima, Peru, last year. It has also opened an office in Montevideo, Uruguay, with more of an institutional character, because the country hosts the Regional Commission for Energy Integration (Cier), an international Latin American organization.
Presently, Brazil purchases energy from some countries, such as Paraguay, due to the bi-national hydroelectric plant of Itaipu, as well as Venezuela and Argentina. That is why most of the projects being considered involve possibilities of purchase of the power to be generated. "Although it has great capacity, Brazil is dependent when it comes to energy," says Gonçalves. This, however, does not rule out Eletrobras’ interest in enterprises in other continents, even if there is no possibility of the energy being transmitted to Brazil. Nevertheless, the company may operate in transmission within the continent.
The beginning
Eletrobras received authorization to operate abroad, as a majority stakeholder in projects, with the passing of a bill in April 2008. Prior to that, it was only allowed to make investments with a minority stake. According to Gonçalves, this expansion-oriented initiative was due to president Luiz Inácio Lula da Silva’s desire to turn the company into a large enterprise, with international presence, in the likes of Petrobras.
Eletrobras is a publicly traded mixed capital company. It is controlled by the Brazilian government and owns majority stakes in 11 subsidiaries, in addition to half the capital of Itaipu Bi-National, on behalf of the government. The company was established in 1962 to operate in energy generation and transmission. In the 1990s, however, it began operating in electric energy distribution as well, in certain locations in North and Northeast Brazil, by legal determination.
Eletrobras has a production capacity of 32,017 megawatts – not counting the output of Itaipu – and over 59,000 kilometres of transmission lines. In 2009, it accounted for 30% of the installed capacity for electric power generation in Brazil. Itaipu – 50% of which is owned by Brazil – has capacity for 7,000 megawatts and accounts for 7% of the total. Eletrobras posted profit of 107 million real (US$ 60.9 million) last year, equivalent to 0.15 real (US$ 0.09) per share. During the period, investment by the company totalled 5.2 billion real (US$ 2.9 billion).
*Translated by Gabriel Pomerancblum
