By Brazil Stock Guide – Enel SpA (ENEL IM) said on Friday (10) that it is not engaged in any discussions regarding a potential change of control of its São Paulo electricity distribution unit, reiterating its interest in renewing the concession amid growing regulatory scrutiny.
The statement follows recent remarks by Brazilian authorities suggesting that a transfer of control could be considered as an alternative to a potential termination of the company’s concession contract.
In its statement, Enel dismissed speculation about ongoing negotiations. “Speculations about negotiations or discussions involving a change of control of the distributor are unfounded,” the company said. It added that the current context calls for structural solutions involving authorities and society to address the impact of climate change on power distribution in densely populated urban areas like São Paulo.
The debate intensified earlier in the week after Brazil’s electricity regulator, the Agência Nacional de Energia Elétrica (Aneel), initiated proceedings to evaluate the possible termination of the concession. On Tuesday (7), Aneel Director-General Sandoval Feitosa indicated that a transfer of control could be one of the alternatives under consideration.
On Wednesday (8), Mines and Energy Minister Alexandre Silveira signaled openness to a “negotiated solution,” emphasizing dialogue. Feitosa later clarified on Thursday (9) that any such arrangement would require regulatory approval and would likely involve a control transfer.
“That negotiated solution mentioned by the minister, which I also believe could be an option, must be structured and will need to be approved by the National Electric Energy Agency. It is not a political solution; while it may involve some political analysis, the final decision rests with Aneel, because under the law, the agency approves any transfer of control,” Feitosa said.
Enel reiterated its long-term commitment to Brazil, which it described as a strategic market. The company also highlighted ongoing investments aimed at improving service quality.
According to Enel, approximately 5 billion reais ($1 billion) have been invested in its São Paulo concession area, contributing to an 86% reduction in prolonged outages in 2025 compared with 2023. The company also expressed confidence in the independence of Brazil’s regulator, the country’s legal certainty and its track record of honoring contracts.
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