By Paulo Winterstein
SAO PAULO--The Brazilian unit of Spanish energy company Abengoa
SA (ABG.MC) won three of the seven operating licenses awarded
Wednesday at a Brazil auction, while a group led by China's State
Grid Corp. took a coveted license to build a transmission network
close to the controversial Belo Monte dam.
Abengoa won rights to build transmission lines and electric
substations in three Brazilian states which will be used to
transmit energy to the northeast of the country from the 11,200
megawatt Belo Monte dam, set to begin producing energy in 2015.
State Grid, along with minority partners Copel (CPLE4.BR) and
Furnas, won the license to build and operate another set of power
lines and substations that will transmit energy from Belo Monte to
Brazil's south and southeastern states. Copel is controlled by the
government of the southern state of Parana, while Furnas is a unit
of federally controlled utility Eletrobras (ELET6.BR).
Belo Monte, set to be the world's third-biggest hydroelectric
dam when it begins output, has been the target of protests by
environmentalists and indigenous-rights activists who worry about
the advance of dams into the Amazon River basin. Attempts to sell
licenses for other dams in the region last week were met with court
orders blocking their licensing.
Abengoa also won licenses for transmission assets in the
northeastern states of Ceara and Rio Grande do Norte, as well as a
transmission line in the state of Minas Gerais.
The auction winner is determined by whomever accepts the lowest
annual revenue from operating the assets.
Copel, bidding by itself and not in a group with State Grid and
Furnas, also won a license to build a power line in the state of
Sao Paulo. Furnas, bidding together with investment fund Caixa
Milao, won rights to build a transmission line in the states of Sao
Paulo and Minas Gerais, while CPFL Energia (CPFE3.BR) won one
license to build a substation in Sao Paulo.
An eighth lot of transmission assets received no bids. The
auction was marked by a lack of much competition, with some
companies that registered for the auction failing to make any bids.
Abengoa won one license because no other company bid for it.
Write to Paulo Winterstein at paulo.winterstein@dowjones.com
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