Virginia-based AES Corpor-ation of the US has won the bid to purchase a controlling interest in Tiete for approximately US$486M.
Tiete is a 2644MW generation company with nine hydro generating plants located along the Tiete and Pardo rivers in the Brazilian state of Sao Paulo. It is located near the largest electrical load centre in the country and has contracts to sell electricity to the major electric distri- bution companies including Eletropaulo, which is controlled by AES and its partners. AES will acquire 61% of the voting stock and 39% of the total capital stock of the company.
Around US$183M of project financing was to be provided by the Brazilian development bank (BNDES), with AES funding the remaining US$303M. However, in mid November a Brazilian court ruled that AES must return the US$183M advanced by BNDES, as financing the purchase by the development bank was not fair to the other competitors.
The ruling was the latest in a number of setbacks to AES’s operations in Brazil during recent months. The state of Minas Gerais government has been fighting to limit AES’s power in the utility Cemig, after it bought a minority stake in the company from the previous administration.