Eletrobrás sees new regulation ready by July

Brazil's government will conclude the regulation of the new power model by July, giving enough time for investors to prepare for power auctions at the end of the year, newspaper Valor Economico quoted Silas Rondeau, president of federal power holding company Eletrobrás, as saying. The regulations will detail who will guarantee the long-term contracts and therefore attract investors, he told the newspaper. "The auction will have clear rules which will be debated with all the associations, representations [of power companies], universities," he said. "There is a trend to improve the model as doubts are put on [the negotiating] table." Government officials have said that a tender of some 4,000MW in new generation capacity is planned by the start of the fourth quarter and that an auction to build transmission lines totaling some 3,000km is planned for August. Companies will be interested in the generation tender because the projects will have 20-year contracts and growing power demand, Rondeau was quoted as saying. Regional integration and the possibility of exporting power will also attract investors, he said. He also said that federal generator Eletronorte's power sale to aluminum maker Albrás will result in a down payment of US$400mn, allowing the power company to finance the expansion of its Tucurui hydro plant, scheduled for completion in 2006.