Program PPI Scan the QR code to access the projects portfolio - - PowerPoint PPT Presentation

Brazilian Investments Partnerships Program – PPI

June, 2020

Scan the QR code to access the projects portfolio

▪ Governance, coordination, monitoring and oversight ▪ Transparency, dialogue, credibility and predictability ▪ Well-designed projects ▪ Technical and legal framework enhancement

Adds on efficiency and value to the process

PPI works as a hub for investments

Concessionaries Embassies

PPI

National and international investors

Sectorial Ministries Regulatory Agencies Legislative Branch Control Entities Licensing Entities Subnational Governments Multilateral Organizations

Financial Agents

(banks, investment funds, etc)

Sectorial Unions

2

How Covid-19 impacted the power market, Discos effects and Covid account

Brasília, junho de 2020

How Covid-19 impacted the power market?

Brazil

Fonte: CCEE

Fonte: CCEE, EPE e ONS

How Covid-19 impacted the power market? Next 5 years

Discos effects

Fonte: CCEE (modificado)

Main Economic / Operational Measures in the Power Sector

(mitigating the risk of insolvency in the entire industry chain)

• Exemption from the Social Energy Tariff for 10 million low-income consumers with

revenues of up to 220 kWh/month (cost of 1.2 billion Reais, out of which 900 million Reais from the Treasury and 300 million Reais from the CDE).

• Authorization of credit operations for Distributors (R$ 15 to R$ 17 billion), to be deferred in

tariff processes over the next 4-5 years (including interest and charges) – Covid account

• Release of the System Service Charge resources, in the total amount of 2 billion Reais for

the consumer segment.

COVID ACCOUNT

Fonte: CCEE (modificado)

R$ 16.25 billion (US$ 2.98 billion)

Temporary emergency measures to address the Covid 19 pandemic impacts on the power sector

01

Presidential Decree 950/2020

4/8/2020

Provided for the creation of the Covid Account

02

Decree 10.350/2020

5/18/2020

Public Hearing on ANEEL's Draft Resolution

03

Normative Resolution Draft

5/27/2020

Covid Account Regulation

04

Normative Resolution 885

6/23/2020

Fonte: CCEE

COVID Account Operation - Steps

*CAFT - Custos Administrativos, Financeiros e Tributários

BILL 5.877/2019 – Privatization of ELETROBRAS

STEPS OF ELETROBRAS PRIVATIZATION PROCESS

Concession fee payment

Half 1/2019

Model Definition

Half 2/2020

Approval of the Draft Bill

Half 1/2021

Corporate approval of the capitalization model

Half 2/2021

Approval by the Federal Court of accounts Capital increase carried out Concession contract signature

Bill Main Goals

• Changing the quota regime

for independent production

• Removing consumer

hydrological risk

• Earmarking part of the

concession fee for reduction

• f charges (CDE)

CHANGING SHAREHOLDING CORPORATION

• Privatization via issing new

shares through a holding company (Federal Government not included)

• Pulverizing shares (Cap on

the shareholders’ voting power - 10%) WHAT STILL REMAINS

• Public holding company of

Eletronuclear and Itaipu

• Government Programs
• Light for All
• Procel-National

Electricity Conservation Program

• BUSA-Federal

government goods under Eletrobras Management

• Proinfa-Incentive

Program to alternative sources CHANGING LAW 10.848/2004

• Revoking the provision

that excluded Eletrobras and its subsidiaries from the National Privatization Program - PND

CORPORATE GOVERNANCE

Private Entity Public Entity

Government Programs

Current PPI Portfolio

POWER SECTOR

Railways – 11 4 PPP renewals 2 new PPP 4 investments in strategic railway 1 privatization - Ferroeste Airports – 24 22 airports in 3 clusters 2 rebids: Natal + Campinas Highways – 20 11 PPP 2 Feasibilty assessments (8,373 km) 7 Licensing processes Ports – 35 4 Privatizations 30 Port Terminals 1 Waterway (Licensing) Defense and Security (PPP’s) - 2 1 Air force Communications 1 Police Communications Economy – 5 4 Privatizations ( ABGF,

EMGEA, Serpro and Dataprev) 1 Lottery (Fixed ratio)

Energy – 14 2 Transmission Lines Auctions 2 Privatizations (Eletrobrás and Nuclep) 6 Licensings 2 Existing Energy Generation (A-4 and A-5) 2 New Energy Generation (A-4 and A-6) Mining – 5 4 CPRM Mining Right ANM Available Areas Regional Development - 5

2 Privatizations (CBTU and

Trensurb)

2 assessments (PISF and Irrigation

Irecê)

1 PPP (line 2 – BH subway)

Supply – 10 2 Privatizations

(Ceasaminas and Ceagesp)

8 Fishing Terminals

(Cabedelo, Belém, Manaus, Aracaju, Natal, Santos, Cananeia ande Vitória)

National Parks and Forests – 11 8 park PPPs (Lençóis

Maranhenses, Iguazu Waterfalls, Jericoacoara, Aparados da Serra/Serra Geral, Canela, São Francisco de Paula, São Joaquim and Brasília)

3 forest PPPs (Humaitá, Iquiri

and Castanho - AM)

Communications and Technology – 5 3 Assessments for Privatization (Telebras, National Post, and EBC) 1 Liquidation (Ceitec) 1 Auction 5G Oil and Gas– 5 Round 17 concession agreement Shale Gas Fracking (Env.

Licensing)

ToR+ (Atapu and Sepia) Regular Offer Health – 2 1 Assessment (Fêmina

Hospital/Porto Alegre)

1 PPP (Guarulhos Hospital/SP)

H

Tourism – 4 4 PPPs of national heritage sites in PB, PE and SP

Brazilian Investments Partnerships Program – PPI

Current PPI Project Portfolio

Policies:

• “Sea road” - Cabotage
• TRIIP (Road passenger

transport)

• PPP daycares
• PPP prisions + correctional

facilities

• Universalizing basic

sanitation + solid waste

• PPP street lightening
• The “projects factory”
• Tourism
• UBS (health basic units)
• BidSim – Oil Auctions
• Strategic minerals

158 PROJECTS + 13 policies

Energy

Energy portfolio

Existing Energy Generation (A-4 and A-5) USD 2.15 billion* New Energy Generation (A-4 and A-6) USD 2.98 billion* Transmission (# 1/20 and # 7/20) USD 2.29 billion Total USD 7.42 billion

* Projection based on the replacement of 100% of the contracts due in 2024 and 2025, through greenfield plants ** Reference based on the results of A-4 and A-6 auctions, held in 2019

16

17

Auctions on Existing Energy (LEE) A-4 and A-5/2020

▪ Brownfield and/or greenfield projects ▪ Investiments: depend on the total demand claimed by buying DISCOS and the size of winning plants ▪ Sources: Thermopower – national mineral coal and natural gas ▪ Contracts term for trading power (CCEARs): 15 years ▪ Auction criteria: lowest price for supplied energy (in R$/MWh), as per good/source and/or technology ▪ Status: in both auctions the public hearing stage has been accomplished (CP 042/2019) ▪ Attention points: ▪ Auctions have been suspended thorugh Ordinance MME 134, of March 28,2020; ▪ MME will assess the need for demand from distributors to decide whether to maintain the auctions later this year or postpone them to 2021 (July / August).

• Features: Auctions on existing energy A-4 and A-5, undertaken at least 4 or 5

years before supplying is due, aim to make up for contracts deriving from new energy auctions carried out in 2005/2007, as well as those remaining from the Thermopower Priority Program - PPT

• Model: Authorization
• Sectorial Ministry/Grantor: MME
• Regulator: ANEEL

Q4/19 Q1/20 Q2/20 Q3/20 Q4/21 Q1/21 Q2/21 LEE A-4/20 LEE A-5/20 Qualifying at PPI Public Hearing Postponing Auctions

18

Auctions on New Energy Generation(LEN)A-4 and A-6/2020

▪ Greenfield project ▪ Investments: depend on the total demand claimed by the purchasing DISCOS and the size of the winning plants ▪ Sources: hydropower, wind, solar and biomass power ▪ Contracts term for trading power in the regulated environment(CCEARs): 20 to 35 years ▪ Auction Criteria: lowest price of supplied (in BRL/ MWh), as per good/source and /or technology ▪ Status: LEN A-4 (Public hearing accomplished – PC 002/2020); LEN A-6 (under assessment) ▪ Attention points: ▪ auctions suspended through MME Ordinance No. 134, of March 28, 2020; ▪ MME will assess the need for demand from distributors to decide whether to maintain the auctions later this year or postpone to 2021 (July / August).

Foto

• Features: The A-4 and A-6 new energy auctions are the basis for

expanding the Brazilian power system and aim to meet the demand claimed by the DISCOS to face the growth in their consumer market, in the period of 4 and 6 years ahead

• Model: Concession/Authorization
• Sectorial Ministry/Grantor: Ministry of Mines and Energy
• Regulator: ANEEL

Q1/20 Q2/20 Q3/20 Q4/20 Q1/21 Q2/21 Q3/21 LEN A-4/20 LEN A-6/20 Qualifying at PPI Postponing auctions

19

Auctions on Transmission Lines #1 and #7/2020

▪ Status: Auction 1/20 - Public hearing 46/2019 has been reopened with the restructuring of the object of the event, under conditions defined by TN 298/2020-SEL / SCT / ANEEL: expansion from 6 to 15 facilities, by incorporating new EVTEs (“feasibility assessments”, which would possibly account for the object of Auction 7/20), covering transmission facilities in 11 states (AM, BA, CE, ES, GO, MG, MS, PR, RS, SC and SP), with the generation of about 21,300 direct jobs ▪ Auction 7/20 – Under assessment ▪ Attention point: ▪ Auctions formally postponed through MME Ordinance No. 134, of March 28, 2020. ▪ Public hearing 46/2019 ends on 6/29/2020.

• Features:
• Object : concession of transmission lines public service
• Grantor: ANEEL (by delegation)
• Sectorial Ministry: Ministry of Mines and Energy
• Regulator: ANEEL
• Brownfield and / or greenfield projects (Amazonas – GT)
• Contract term: 30 years
• Auction Criteria: lowest allowed annual revenue (RAP)

Q1/20 Q2/20 Q3/20 Q4/20 Q1/21 Q2/21 Q3/21

Auction #1/20 Auction #7/20

Qualifying at PPI Qualifying at PPI Public hearing suspended

Federal Court of Accounts/Bidding Notice

Auction Contract

Auction Original Structuring Number of Facilities TLs (km) SEs (MVA) Invest. (R$ bi) Schedule 01/2020 6 300 2,100 2 Jul/20 07/2020 N/A 2,500 4,200 8 Dic/20 Restructuring and Reprogramming (in the face of the pandemic) 01/2020 15 3,690 7,160 10.2 Dic/20 07/2020 N/A N/A N/A N/A N/A

20

ELETROBRAS - Brazilian Power SOE

▪ Brownfield project

• Power generation capacity: 51.143 MW
• Generators (total): 125 plants (68 Corporate and 67 SPVs)
• Hydropower : 46,259 MW
• Nuclear power: 1,990 MW
• Thermopower (other techonologies): 1,870 MW
• Wind and Solar: 1025
• Transmission Lines: 71,154 km (64,894 km, voltage > 230 kV)

▪ Direct and indirect share of the Federal Government ▪ ON – 72.22% ▪ PN – 6.52% ▪ Total – 61.69%

(Source: Eletrobras Financial Statements – 2019)

▪ Status: Awaiting bill 5877 / 2019 approval

▪ Attention point: closely assessing progress of Bill 5877/2019 in the Congress, evaluating the amendments presented and proposing remarks, with a view to mitigating any difficulties in the capitalization process

• Features: holding comprises a system of companies, such as Eletrobras

CGT Eletrosul; Eletrobras Chesf; Eletrobras Eletronorte; Eletrobras Eletronuclear; Eletrobras Furnas; and direct and indirect share in 136 Special Purpose Entities (SPEs).

• Sectorial Ministry: Ministry of Mines and Energy
• Bill 5877/2019, about Eletrobras privatization, has been sent to the

Congress in 11/5/2019

• Type of privatization: increasing social equity by issuing common

shares Q4/19 Q1/20 Q2/20 Q3/20 Q4/20 Q1/21

Bill sent to Congress

Bill in progress Bill in progress