Brazil’s Neoenergia mulling purchase of local power distributor

Brazil’s Neoenergia is looking at acquiring Ceará state’s power distributor Coelce, but “will not do anything crazy” to purchase it, CEO Eduardo Capelastegui Saiz told an investors webcast on Thursday. 

“The market is very volatile, and we have to be prudent,” he said, highlighting that Neonergia has a 25bn-real (US$4.8bn) three-year capex. 

Coelce is being sold by Italian multinational Enel as part of its US$21.5bn global divestment plan. In September 2022, Enel sold Goiás state utility Celg-D to Equatorial Energia for 1.6bn reais. 

Neoenergia, which is the local subsidiary of Spain’s Iberdrola, has five power distribution concessionaires in Brazil: Neoenergia Coelba, in Bahia, Neoenergia Pernambuco, Neoenergia Cosern, in Rio Grande do Norte, Neoenergia Brasília and Neoenergia Elektro, in São Paulo and Mato Grosso do Sul.

These companies received 5.5bn reais in investments in 2022, of which 3.2bn reais were for network expansion. By the end of the year, their active consumers reached 16mn, up by 295,000. 

TRANSMISSION

During the call, Saiz said that Neoenergia will participate in this year’s power transmission tenders, “as we did in the last five years.”

In 2022, the company acquired two power transmission lots related to new lines in Minas Gerais, São Paulo and Mato Grosso do Sul. 

2022 OVERVIEW

Last year, Neoenergia invested 9.9bn reais, up 6%. Investments were driven mainly by the expansion of the renewable business, with new wind and solar generation projects, and in transmission. The company had 44 wind farms, seven hydroelectric plants, and two solar parks, totaling 4,473MW, in operation and under construction.

The company had 42 wind farms in operation, with installed capacity of 1,345MW. 

The wind portfolio is expected to reach 1.6GW in the coming months, 51% of which will go to the regulated market and 49% to the free contracting environment.

Neoenergia posted a 4.7bn-real profit in 2022, up 20%, and a 936mn-real profit from October to December, up 47% year-on-year.

Ebitda grew 32% in 2022, reaching 9.7bn reais, and 16% in the last quarter, reaching 2.5bn reais.