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Brazil's Cemig sells hydroelectric dam operating licenses for $3.8 bln to CSPI, Engie and Enel


By Luciano Costa

Petroleumworld 09 28 2017

Brazil 's government on Wednesday sold licenses to operate four hydroelectric dams for a total of 12.12 billion reais ($3.80 billion) in an auction won by Chinese and Europe an bidders.

The amount raised is 10.1 percent above the 11 billion reais minimum asking price the government had set.

China's State Power Investment Corp will pay 7.18 billion reais to operate the São Simão hydropower plant, the biggest of the four assets auctioned.

In a statement, the company said it will continue looking for acquisition targets in Brazil , adding it favors investments in hydroelectric and wind power projects.

France 's Engie SA acquired the licenses to operate the Jaguara and Miranda dams for a combined sum of 3.53 billion reais.

Gustavo Labanca, a senior Engie executive, said the company may sell debentures or commercial paper in Brazil to fund payment of the licenses.

Italy 's Enel Spa won the bid for Volta Grande dam for 1.41 billion reais.

Brazil 's government was pleased with the result of the auction, which was in line with expectations, Planning Minister Dyogo Oliveira said on Twitter.

Depending on the dam, the bidders paid between 6.5 percent and around 22.5 percent above the government's minimum price.

The auction results signal strong investor appetite in the privatization program of President Michel Temer, who is trying to raise money to cut Brazil 's budget deficit.

Companhia Energética de Minas Gerais previously operated all four dams. Shares of Cemig, as the company is known, fell 1.6 percent to 7.92 reais in early afternoon trading.

$1 = 3.1958 reais

Story by Luciano Costa; Writing by Ana Mano; Editing by W Simon from Reuters.

reuters.com 09 27 2017

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