By Brazil Stock Guide – Brazil’s electricity regulator ANEEL approved on Tuesday (24) a repactuation of hydropower concession payments that could generate up to 7.8 billion reais ($7.8 billion) in revenue. The funds will be directed toward tariff relief measures in states across the Amazon and Northeast regions.
The decision revises the terms of payments related to the Use of Public Asset (UBP) charged to hydropower plants. Companies will have 60 days to signal whether they intend to join the new framework.
Reporting director Fernando Mosna backed requests from industry players to allow partial adhesion by members of hydropower consortia. Under the approved model, individual partners within a consortium may opt into the early payment scheme independently.
The measure faced opposition from ANEEL’s director-general, Sandoval Feitosa, who voted against allowing partial participation. The majority of the board overruled his position. All other elements of the proposal were approved unanimously.
If only some members of a consortium choose to advance payments, those declining to participate must continue paying their respective UBP share through the end of the concession term. Participating partners will assume joint liability for unpaid amounts in the event of default.
Mosna maintained the calculation methodology recommended by ANEEL’s technical staff, including a weighted average cost of capital (WACC) set at 7.31% per year. Industry representatives had pushed for adoption of an 11.08% gross rate.
Some companies warned the structure could result in a so-called “negative discount,” meaning the revised payment amount would exceed the original obligation, potentially discouraging participation. Mosna said such outcomes would be limited to three specific hydropower plants.
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