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Privatization of Eletrobrás

image credit: Rafael Herzberg
Rafael Herzberg's picture
Consultant energy affairs, Self employed

Rafael Herzberg- is an independent energy consultant, self-employed (since 2018) based in São Paulo, Brazil* Focus on C level, VPs and upper managers associated to energy related info, analysis...

  • Member since 2003
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  • Jun 23, 2021

Privatization of Eletrobrás

The recently approved form of the privatization of Eletrobrás brings two worrying aspects.

1) Mandatory projects

Called by the press and by a list of economic analysts a real absurdity. It is about requirements for contracting generation plants that lack economic viability and for the feeling that this was a previously established pact between the real, hidden "owners" of these projects for the northern region of the country.

2) Government Veto Power

The Government will maintain a 45% minority stake in Eletrobrás, but will have the power of veto. That is to say, the new controller will have very limited power or changing the ongoing super precarious situation of the company. The new owners will have to satisfy the requirements imposed by the Brazilian Government. In this line, there is a clear intention to maintain the schemes that always reign in Brazil.

And for these two conditions to prosper, of course, the regulator will have to keep tariffs for the "new" Eletrobrás consistent with these two, at least doubtful, aspects.

In my opinion it is as if Eletrobrás will not actually be privatized. Everything remaining exactly the same.


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