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Energy and the devaluation of the Brazilian Real


Energy and the devaluation of the Brazilian Real

According to the analysts the Real was one of the currencies that depreciated the most among the emerging countries.

In question, the huge imbalance in public finances associated with 1) an ostensible willingness of the three constituted powers to maintain their special conditions and 2) expensive and inefficient public management.

How does this situation reverberate in the energy business?

1) Solar energy

A good part of the generation system is imported and therefore denominated in hard currency

2) Foreign investors

They calculate their energy projects with returns also in hard currency.

3) Thermal power plants

It makes up a not insignificant part of the national energy matrix, and also depend on imported fuels designated in Dollar

4) Brazilian Risk

A not insignificant and increasing premium enters the financial equation of projects in Brazil to include "country risk".

Long-term energy prices, out of new new plants, to be built, are expected to accompany, to a large extent, hard currencies. Or do you believe in fairy tales?

Rafael Herzberg's picture

Thank Rafael for the Post!

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