The State Grid Corporation of China has had its bid accepted in Brazil’s largest power transmission line tender ever by offering a steep discount.
The 18 billion reais (US$3.64 billion) project – to build more than 1,500 kilometres of line across northeastern and central-western Brazil – is expected to generate annual revenue of 1.94 billion reais (US$396 million) for the Chinese state-owned electric utility company, reports Reuters. The amount represents a discount of nearly 40 percent on the lot’s maximum annual revenue.
The project is the second in a series of tenders planned by the government of President Luiz Inácio Lula da Silva to transfer renewable energy from the northeast, where wind and sun are abundant, to the major population centres in the south.
[See more: China Development Bank issues credit line for environmental projects in Brazil]
A consortium comprised of transmission firm Alupar and investment fund Mercure won the second largest lot – 1,100 kilometres of line across three Brazilian states requiring an investment of 2.6 billion reais – while the third went to Celeos Redes. That project consists of just 388 kilometres of line across a single state, with an estimated cost of 1.03 billion reais.
The latest tender saw little competition, with many bidders sitting out due to the high investment costs and technical expertise needed.
The State Grid Corporation is one of the largest players in the Brazilian transmission line sector, controlling 24 concessionaires, 19 of which are wholly owned. Their previous projects in Brazil include the world’s longest transmission line, stretching more than 2,500 kilometres across the Amazon to the southeastern coast.
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