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USD 1.5 billion delinquency "unlocked" in August?

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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...

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  • Jul 16, 2020

USD 1.5 billion delinquency "unlocked" in August?

5 years later, the default of CCEE (Chamber of Commercialization of Electric Energy - the Brazilian power clearinghouse) will be resolved - according to official sources of the Legislative, Judiciary and Executive.

The climate is "exultant", after all a huge problem will cease to exist.

Although from the beginning the CCEE has assured the agents that they would return their money adjusted for inflation, the following questions remain:

1 °) And the real cost incurred by the agents?

The interest rate (above inflation) for borrowing in the last 5 years can be estimated at 10% per year - conservatively.

In 5 years, it reaches more than 60%. In other words, the real value of this official default is USD 2.6 billion.

2 °) What will CCEE do to prevent this problem from occurring again?

The market wants a firm answer so that it feels comfortable making (again) its settlements normally.

3 °) Who is responsible?

Do CCEE managers have the power and autonomy to - statutorily - ensure normal settlements?

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