Brazil’s Copel selling small power generation assets

Brazil’s Copel has signed a contract with Electra Hydra/Intrepid for the sale of 13 small power generation assets for 450mn reais (US$77mn). 

An analyst told BNamericas that the operation is another move in the right direction for the former Paraná state-run electric power firm.

Copel said in a press release that the divestment will improve the operational efficiency of generation unit Copel GeT's portfolio and optimize the company's capital allocation, considering its strategy to focus on larger assets.

Ângelo Belitardo, manager at Hike Capital, said that since its privatization in August 2023, which raised 5.2bn reais, Copel has made significant progress.

He said the company renewed concessions for important hydroelectric plants, such as Foz do Areia, Segredo and Salto Caxias, for another 30 years, ensuring the operation of 64% of its installed generation capacity.

“It also announced the payment of 600mn reais in interest on equity [a type of dividend] to shareholders, reinforcing its commitment to generating value,” Belitardo told BNamericas.

He said the sale of small assets and the renewal of concessions indicate a strategy focused on larger assets and operational efficiency.

“Participation in backup capacity tenders and continued investment in distribution indicate a focus on expansion and consolidation in the national electricity sector,” Belitardo said.

Capex

Copel plans to invest 3bn reais next year, up 25% from the investment projection for 2024.

Of the total, 2.5bn reais will go to distribution arm Copel Distribuição, while Copel GeT will receive 464mn reais.