Spotlight: Brazil electric power M&A highlights

Competition watchdog Cade has approved EDF EN's acquisition of LDA Energia’s 600MW Licínio de Almeida wind power complex, under development in Brazil’s Bahia state.

The decision was published Thursday in the federal gazette.

Cade has approved several electric power M&As this year.

On March 29, Cade authorized Celeo Redes Brasil's acquisition of Cobra Brasil Serviços, Comunicações e Energia’s 50% interest in Brilhante Transmissora de Energia (BTE I) and Brilhante II Transmissora de Energia (BTE II). 

Celeo already held 50% of BTE I and II, which are specific purpose entities that operate transmission lines in Mato Grosso do Sul state. 

On the same day, the regulator approved Itaú Unibanco’s acquisition of preferred shares representing up to 19.9% of the corporate capital of Guaimbê Solar Holding, a subsidiary of AES Tietê that owns wind and solar farms. But completion of the deal is subject to the fulfillment of other conditions.

AES Tietê, also known as AES Brasil, plans to use the funds to expand its renewable energy portfolio.

Earlier in March, Cade approved the acquisition of a PV solar power complex in Pernambuco state by Equinor and Scatec Solar. 

The operation involves the sale of Kroma Comercializadora de Energia and Z2 Energias Renováveis’ interests in special purpose entities Flores Energia, São Pedro e Paulo I, São Pedro e Paulo V Energia and São Pedro e Paulo VI Energia, which are responsible for the complex that will be built in Flores municipality.

The regulator had also authorized the acquisition by Tríade Energias Renováveis, Companhia Energética Rio Preto and Companhia Energética Rio Novo of the Nova Maurício, Glória and Mello small hydroelectric power plants in Minas Gerais from mining giant Vale. 

The purchase of Eneva’s 50% stake in the São Marcos thermoelectric project by Golar Power (Hygo Energy Transition) also received the green light. 

On March 12, Cade authorized AES Tietê Energia to buy Salus investment fund’s shares in Ventos de São Ricardo Energias Renováveis, the owner of 13 non-operational energy plants totaling 437MW of installed capacity in Maracanaú municipality, Ceará state. 

Other operations that received approval include: 

– Hygo Energy Transition's acquisition of the remaining shares held by Evolution Power Partners, Brazilian Energy and OAK Participações in Golar Power Brasil 2 Participações and Centrais Elétricas Barcarena (Celba), focused on thermoelectric power generation; 

– Portugal’s EDP's purchase of Mata Grande Transmissora de Energia (MGTE), a consortium formed by IG Distribuição e Transmissão de Energia and ESS Energias Renováveis that acquired one lot at a power transmission auction in 2018; 

– the acquisition by Orix Europe of an 80% controlling interest in Elawan, a Spanish multinational that was previously controlled by Acek Energías Renovables and Clear Wind Eólica, with Elawan owning several wind power projects in operational, construction and development phases.

Operations under analysis involve:

– the acquisition of Petrobras’ 51% stake in the Mangue Seco 2 wind power plant by investment fund Fundo de Investimento em Participações Multiestratégia Pirineus (FIP Pirineus); 

– the acquisition by Companhia Brasileira de Alumínio (CBA), part of the Votorantim group, of interests in the Ventos de Santo Isidoro Energias Renováveis and Ventos de Santo Anselmo Energias Renováveis wind power generation companies. The targeted firms are subsidiaries of VTRM Energia Participações, a 50:50 joint venture formed by Votorantim Geração de Energia and the Canada Pension Plan Investment Board. 

PRIVATIZATIONS

Cade will evaluate the acquisition of CEEE-D by Equatorial Energia, which was formalized March 31 at a privatization auction at São Paulo’s stock exchange. 

The company’s generation and transmission units are also expected to be privatized this year, as are Companhia de Eletricidade do Amapá (CEA) and Goiás state’s CELG-GT and CELG-D. 

And the federal government is still planning to privatize Eletrobras, whose sale could raise up to US$18bn.