Minister Paulo Guedes (Economy) said this Thursday (7th) that the war in Ukraine brought a geopolitical risk to energy security and that the privatization of Eletrobras represents a decisive step to increase investments in the sector and contain the problem.
“Now there is a second crisis, a war, which has accelerated us towards the energy transition. I mean. The idea of ​​energy security, of geopolitical risk, is now a constant in our lives. It is a problem of the greatest gravity and seriousness”, stated at an event on the privatization of Eletrobras at the TCU (Union Court of Auditors).
For Guedes, Eletrobras does not have the capacity to invest the amounts necessary to meet the country’s energy demand over the next few years. With privatization, he said, it will be possible to mobilize resources to diversify the Brazilian energy matrix, make generation cleaner, recover watersheds and allocate money even to nuclear energy.
“We are really going to unlock the frontiers of investment in all dimensions. We are leaving a past, a legacy left by the construction of this beautiful company — which was reaching its limits”, he said. “Brazil is taking a decisive step in Brazilian energy security,” he said.
According to the minister’s accounts, the company would need to invest around R$ 15 billion a year to maintain its relevance in the Brazilian energy matrix, but it can only invest R$ 3.5 billion. “The company not only puts itself at risk, it loses that market share, [como] is compromising Brazilian energy security,” he said.
The privatization of Eletrobras has been discussed since 2017 and the economic team tries to advance with the theme even in an election year. The matter is currently being debated at the TCU with the government, the BNDES (National Bank for Economic and Social Development) and parliamentarians.
The largest energy company in Latin America, owner or partner of the most important hydroelectric plants in Brazil, such as Belo Monte and Furnas, and responsible for almost 44% of the country’s transmission system, the state-owned company was placed in a race against time to be privatized.
The process needs to be completed in the first half of the year, before the electoral campaign enters the decisive phase and alienates investors.
The Union currently has a 72% stake in Eletrobras’ voting capital, and the other 28% is held by minority shareholders. The government’s intention is to give up control of the company and, at the end of the process, to hold 45% (the other shareholders would keep 55%).
The forecast is that Eletrobras will earn R$ 25 billion in the process and become a company without a defined controller (which, in English, is called a “corporation”). Each shareholder may own a maximum of 10% of the company.
The president of BNDES, Gustavo Montezano, said this Thursday that the approximately R$ 25 billion in resources obtained by the company will be used in the purchase of energy concessions. “The company’s concessions will have their term extended and it will use these resources to acquire these concessions offered and sold by the Union”, he said.
In addition, the company would be obliged to make certain investments. Among them, R$ 6.7 billion in the revitalization of hydrographic basins and navigability, in addition to R$ 2.1 billion in energy efficiency in the North.
“The main objective of this transaction is not fiscal, but social and Brazilian energy development,” said Montezano.
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