edp announcement

EDP - Energias do Brasil acquired the exploration rights of Santo Antônio do Jari HPP with 300 MW of installed capacity

Thursday, 16 June 2011

EDP – Energias do Brasil, S.A. announces the acquisition, by its controlled company Ipueiras Energia S.A., of ECE Participações S.A., from CS and Participa Groups. The acquired Company holds a 90% stake in Consórcio Amapá Energia (Amapá Energia Consortium) which holds Santo Antônio do Jari HPP operation rights.

EDP – Energias de Portugal ("EDP") informs that EDP – Energias do Brasil ("EDP Brasil"), owned 64.8% by EDP has released the following statement:

EDP – Energias do Brasil, S.A. (BM&FBovespa: ENBR3) announces the acquisition, by its controlled company Ipueiras Energia S.A., of ECE Participações S.A., from CS and Participa Groups. The acquired Company holds a 90% stake in Consórcio Amapá Energia (Amapá Energia Consortium) which holds Santo Antônio do Jari HPP operation rights. The power plant is located between the border of Pará and Amapá States The remaining 10% stake of Amapá Energia Consortium is owned by Jari Energética S.A. (JESA), owner of the original public concession, which also has the right to sell its stake to Ipueiras Energia S.A. for the same price and terms of payment (tag along). The deadline to exercise this right expires on July 15th, 2011.

The installed capacity of Santo Antônio do Jari HPP will be 300 MW, which corresponds to 196.1 average MW of assured energy (load factor of 65%), already approved by Aneel, of which 190 average MW has been sold at the energy A-5 auction of December 2010 for 30 years until 12/31/2044, equivalent to the end of the concession.

The project includes the addition of 73.4 MW of installed capacity, which is pending approval by Aneel. The installation permit issued by IBAMA already includes this capacity expansion. The construction is scheduled to begin on the third quarter of 2011 and the Builder Consortium is formed by CESB, Alstom and Areva Koblitz, with which ECE has already signed an EPC turnkey contract. The commercial operation startup is scheduled for January 2015.

Project's main characteristics: 

• Energy Sales: 190 average MW for 30 years at a price of R$ 104/MWh (reference date: Dec/10). The additional assured energy, resulting from the expansion of installed capacity, will be traded after approval by ANEEL and MME;

• Eligibility for ADA Tax Benefits: 75% reduction of income tax after one year of commercial operation for a maximum period of 10 years; and

• Total expected disbursement includes the investment in the plant construction for installation of the maximum capacity of 373.4 MW and payment to sellers, and may vary between R$ 1,270 million and R$ 1,410 million, subject to fulfillment of certain conditions, including the approval of the installed capacity expansion to 373.4 MW by Aneel and the approval of the assured energy related to the capacity increase, besides the possible exercise of the tag along rights.

• Anticipated schedule of disbursement (adjustment index IPCA):

o 2011: 25%;
o 2012: 31%;
o 2013: 31%;
o 2014: 13%.

• The financing of the construction considers long-term funds with estimated leverage up to 70%.
The closing of the acquisition depends on the fulfillment of certain conditions precedent, including regulatory authorizations among which the approval of Aneel to the transaction.

This acquisition reinforces the commitment of EDP - Energias do Brasil S.A. for the implementation of its growth strategy in the generation segment through the acquisition of a project of significant size, ready to be built and with energy sold in the long term.

EDP – Energias de Portugal, S.A.