ELECTROBRAS, BRAZIL’S STATE owned electricity utility, has published the power purchase price (PPP) for small hydro developers under its Proinfa programme.
The prices announced were considered low by investors, due to high financing costs. The government has set a price of US$40.10/MWh for small scale hydroelectric projects, while investors believe about US$42.84/MWh, would be reasonable.
Electrobras is still registering companies interested in developing renewable energy projects under the Proinfa initiative. Under the programme, Electrobrás will buy electricity produced from the different renewable resources under contracts of up to 20 years.
In April 2002, the Brazilian government passed Law 10.438, or Proinfa, which was designed to stimulate development of biomass cogeneration, wind power and small hydro by guaranteeing power sale contracts to the first 1100MW of projects under each renewable source. The companies included in the register will also be eligible to obtain financing for 70% of the projects from national development bank BNDES.