Suez Energy International has sold EUR3.3 billion worth of electric power from the Estreito hydropower plant in an auction organised by the Brazilian government. The energy was sold to a pool of distributors paying BRL126.57 per MWh for energy from the plant.

The auction covered new power plants and offered energy from hydropower and thermal plants in contracts starting from 2012. The 1087 MW Estreito plant is currently under construction by a consortium led by Suez and is scheduled to be complete by 2011.

The Brazilian distributors will take an average of 256 MW of power from the Estreito plant under 30-year indexed power purchase agreements. Suez’s partners in the project are autoproducers and will consume their share of the plant’s output on their own industrial sites.

The successful auction of energy from the plant will enable Suez to complete financing of the plant, in which Suez holds a 40.07 per cent share. Suez’s partners are Companhia Vale do Rio Doce (30 per cent), Alcoa (25.49 per cent) and Camargo Correa (4.4 per cent).

Power auctions in Brazil are held for ‘old’ energy, i.e., energy from existing power plants and for ‘new’ energy from plants under construction. The sale of long-term energy contracts helps to address the growing demand for electricity in the country by encouraging investment.

Mauricio Bähr, CEO of SUEZ Energy Brazil commented: “We began construction of Estreito in January 2007, and this Power Purchase Agreement will enable us to finalise the financial agreement with BNDES, completing the development of the most important hydro project under construction in Brazil today.”

“These auctions have enabled us to get long term contracts which provide a secured global cash flow and will become an interesting contributor to Tractebel Energia’s business,” said Dirk Beeuwsaert, CEO of Suez Energy International.

Suez acquired the Estreito concession in 2002. The company is also constructing the 243 São Salvador hydropower project on the Tocantins river, while its subsidiary, Tractebel Energia, is building the 450 MW Cana Brava hydro plant, also on the Tocantins river.