The Chamber of Deputies approved this Monday (21), by 258 votes to 136, the MP (Provisional Measure) that allows the capitalization of Eletrobras – a state-owned company linked to the MME (Ministry of Mines and Energy) and responsible for 30% of the energy generated in Brazil. The text was analyzed in a hurry by the parliamentarians, because if it was not voted on by this Tuesday (22) it would expire. Despite having the force of law in their own right, all provisional measures need to be approved by the National Congress within 120 days to remain valid.
Custom-made had already been approved by the Chamber in May of this year, but it was changed by senators and had to be voted on again by deputies. With approval, the document was sent for presidential sanction. The MP authorizes the Union to grant, for a period of 30 years, new concessions for the generation of electric power under the ownership or control of Eletrobras. The privatization will be carried out in the form of an increase in share capital, through the public subscription of common shares.
Despite losing much of its control over the state-owned company, the Federal Government will still have 45% control of the company and the right to a special class share (golden share) – which guarantees the power to veto decisions made by the assembly, in order to prevent a single shareholder from holding more than 10% of the company's capital. The Union expects to privatize Eletrobras by February of next year, after completing the necessary procedures, including studies carried out by BNDES (National Bank for Economic and Social Development).
Changes
In order to get the provisional measure approved by the Senate, rapporteur Elmar Nascimento (DEM-BA) had to make specific changes to the original document. The main change was the removal of the section that required the contracting of thermoelectric plants before the start of the state-owned company's capitalization process. This was the government's third attempt to privatize Eletrobras in recent years. The first was in January 2018, through Bill 9463/18, which was discussed in a special committee but was not voted on. The second time was in November 2019, with Bill 5877/19.
Check out the Eletrobras MP topics:
- Privatization model: The state-owned company will be privatized through capitalization and the Union will have only 45% control of the company. The increase in the company's share capital will be done through a public offering of shares.
- Special class: The Union will have special class preferred shares and each shareholder will not have voting power exceeding 10%.
- New state-owned company: It was decided that a new state-owned company will be created to manage Eletronuclear and Itaipu Binacional, which will not be privatized.
- Current employees: The text allows employees laid off during the company's restructuring to opt, within six months of their dismissal, to purchase shares with the severance pay. It was also established that the Union may take advantage of workers in other companies in the sector that remain under its control.
- Proinfra: The text establishes the need to extend contracts for plants built through Proinfa (Incentive Program for Alternative Electricity Sources) by 20 years.
- Gas thermal plants: The document determines the contracting of natural gas-fired thermoelectric plants to supply 8 MW of energy for 15 years in locations that do not have natural gas transport infrastructure.
- PCHs: There will be a market reserve for contracting PCHs (Small Hydroelectric Plants) and the rule applies to auctions held until 2026.
- Tucuruí Line: The Union may authorize the construction of the Tucuruí Line – a transmission system that would connect Roraima to the national electrical system, without the need for environmental licenses from Ibama (Brazilian Institute of the Environment and Renewable Natural Resources) and Funai (National Foundation of the Indian).
- Environment: The Federal Government must create a plan to recover the reservoirs of hydroelectric plants, improve the navigability of the Tietê-Paraná waterway and reduce the costs of generating energy in the Legal Amazon, in addition to improving the navigability conditions of the Madeira River and the Tocantins River.
