Brazil cities auction street lighting PPPs

Belém, capital of Brazil’s Pará state, and Sapucaia do Sul, in Rio Grande do Sul, have auctioned street lighting PPPs for a combined 310mn reais (US$56mn) to the private sector.

Street lighting PPPs are increasingly common in Brazil as municipalities seek to reduce fixed costs.

“We are embracing states and municipalities, with training, technical and financial support so that they are able to conduct partnership projects in the most diverse areas,” Martha Seillier, secretary of the concessions and privatization program (PPI) said in a press release.

“The public lighting projects supported by the federal government and tendered this year will make it possible to modernize 393,000 poles, doubling the number of public lighting points under private management in the country. These initiatives make it possible to reduce energy consumption by more than 50%, generating savings in public resources, in addition to increasing the feeling of security for citizens,” she added.

The PPPs were modeled by municipalities with the support of the federal government, state-run bank Caixa Econômica Federal and IFC.

Luz de Belém II consortium won Belém’s PPP, involving the modernization of more than 90,000 light points. With 1.1mn reais, the consortium offered the lowest maximum monthly rate the municipality pays for the service. 

In Sapucaia do Sul, Ilumina Sapucaia do Sul consortium won with a monthly cost of around 213,000 reais for the municipality. The PPP involves the modernization of 13,000 light points.

The winner in each municipality will develop, modernize, expand, operate and maintain the public lighting network for 13 years. 

The PPPs are part of efforts to introduce LED lamps and remote management devices to reduce energy consumption and improve service quality and the use of urban spaces.

The federal government helped 20 local administrations to structure such PPPs for a combined 600,000 light points. Five contracts were already offered and 15 will be auctioned soon.