Information from the Brazilian and international Electric Power Sector and its companies, since June 1998.

1. Financial Results

According to Cesp's president, Guilherme Cirne de Toledo, Cesp Paraná's price, already subtracting its debts, is evaluated between R$ 12 and R$ 13 billion. (15.12.1999)

2. Investments

Aneel scheduled the public audience that will mark the beginning of financial proposals bidding for the construction and exploitation of the transmission lines Taquaruçu - Assis and Assis - Sumaré, in the State of São Paulo, for 28.12.1999. (17.12.1999)

The Secretary of Energy of the Ministry of Mines and Energy, Benedito Carraro, affirmed on 16.12.1999 that electric power generating projects will receive investments of R$ 4.6 billion in 2000. (17.12.1999)

Itá hydroelectric's lake, in the border of Rio Grande do Sul and Santa Catarina States, began to be formed on 16.12.1999. It is expected that this power plant, the larger under work in Latin America, will begin operating in June 2000. 98% of it is already accomplished. (17.12.1999)

After having success in its efforts for ensuring the feasibility of gas thermoelectric enterprises, MME is now dealing with something even harder: to convince the private sector to invest in projects of hydraulic generation. This has been the major bottleneck of the new electric industry model, because businessmen have shown reluctance in taking part of an enterprise whose rules are yet observed with reticence. (14.12.1999)

Two electromechanical consortiums will participate of the bidding for supplying the last two turbines for Itaipu hydroelectric power plant. Each turbine will have 700 MW capacity. The bidding will be held on 15.12.1999. (14.12.1999)

The energy industry should count with R$ 100 millions for new projects from April 2000 on. It is part of an investment fund being form by the group Brasilinvest and Usaid, an USA agency for international development. (13.12.1999)

According to the Minister of Mines and Energy, Rodolpho Tourinho, the completion of the second phase of Tucuruí's hydroelectric, estimated in R$ 1.3 billion, will depend of the sale of its actives in the year 2000. (13.12.1999)

Henri Philippe Reichstul, Petrobrás's president, said that by mid-2000 the company should conclude a study for the construction of a new gas duct of similar size to the one that connects Brazil and Bolivia. (13.12.1999)

El Paso will begin the works of its first natural gas thermoelectric power plant in Brazil, the Araucária power plant, in Paraná State, on 31.03.2000. (13.12.1999)

BP Amoco has already planned its first step to operate electric energy generation in Brazil. It is a thermoelectric power plant in the city of Pecém, State of Ceará, with an installed capacity of 250 MW in its first phase, which can be expanded to up 500 MW. (13.12.1999)

3. Financing

A large program of financial support to the electric power industry was announced by BNDES' Finances Director, Fernando Perrone. It is budget in R$ 17 billion, and R$ 12 billion of which will come from BNDES. (17.12.1999)

Coelba collected US$ 250 million in the foreign market in an operation with a three-year term due. (17.12.1999)

VBC Energia concluded the foreign collection of US$ 100 million in an operation with no precedents. For the first time, BID is supplying coverage for 'risk Brazil', a kind of insurance that guarantees that the resources will be sent to the foreign investor in case the country does not honor its foreign commitments within the papers' due period. (16.12.1999)

The group Brasilinvest and Usaid, US Agency for International Development, began to articulate the creation of an investment fund specifically for the electrical industry. (14.12.1999)

The Brazilian government is authorized to reimburse Eletrobrás in up to R$ 6.371 billion, equivalent to the cost excess of the nuclear power plant Angra II. The reimburse will occur upon the cancellation of credit kept by the federal government against the power plant, when it succeeded Nuclebrás, according to the Provisory Measure number 1.868/21. (13.12.1999)

4. Tariff

Cemig defined the new criteria for cutting subsidies to customers that consume up to 180 Kwh per month on 15.12.1999. This measure will represent a readjustment of up to 196,91%. (16.12.1999)

5. Merger and Acquisitions

Brascan Bank will insure the auctions that BNDESPar will held of the two blocks of Light's shares (23.1% of the voting capital) and of Eletropaulo Metropolitana's shares (59.13% of preferred shares) in the first week of January 2000. (17.12.1999)

Aneel authorized CPFL to incorporate its controller DOC4 Participações. (16.12.1999)

Celesc moved ahead in its restructuring process that in its second stage aims to sell part of its capital to private groups. In a general assembly held on 14.12.1999, the company approved the purchase of 19.7% of Casan's share control. (14.12.1999)

VBC's capital increase, even if risking scattering its present controllers (Votorantim, Bradesco and Camargo Corrêa), is the next step in CPFL's shares' repurchasing. CPFL controls VBC and it is the largest electricity distributor in São Paulo. (13.12.1999)

6. Privatization

Celpe will be auctioned for the minimum price of R$ 1.78 billion on 17.02.2000. (17.12.1999)

According to BNDES' infrastructure director, Fernando Perrone, the sale models of the next privatization processes in the electric energy industry will include clauses that will ensure the fulfillment of investments goals. (15.12.1999)

BNDES's president, Andrea Calabi, confirmed that the government is studying the possibility of pulverizing in the market shares of state-owned companies in future processes of privatization. (15.12.1999)

7. Contract and Purchasing

Enron, CEG's major shareholder, may be the first company to sign a gas distribution contract for thermogeneration of electric power in the State of Rio de Janeiro. (17.12.1999)

Peróxidos do Brasil, belonging to the Belgium group Solvay, signs a 15 year-energy purchase contract with Copel. (16.12.1999)

The Electric Energy Concession and Distribution Contract between Aneel and Sulgipe was signed on 13.12.1999. (14.12.1999)

8. Electric System

The tests Aneel and ONS held with the equipment of the room that will monitor all information of the country's and the world's electric power industry during the passage of the year in order to detect any eventual trouble caused by Y2K bug were found satisfactory. (17.12.1999)

Representatives from electric energy companies and public agencies related to the electric energy industry reaffirmed during a meeting in Brasília on 14.12.1999 that there is no possibility of any problem occurring in the passage of the year. (14.12.1999)

9. Moreover

MAE's rules were finally completed. After almost a year of studies, they were approved by the new market's Executive Committee on 16.12.1999. (17.12.1999)

Due to the judicial recess, the issue of the about R$ 360 million loan given to AES by BNDES in the occasion of Tietê's auction should end 1999 with no news. The deadline for the returning the resources was postponed to 10.01.2000. (17.12.1999)

President Fernando Henrique Cardoso signed a decree bestowing 10 concessions to Tietê for the production and commercialization of electric energy as an independent producer. (16.12.1999 )

An ordinance signed by the Minister of Mines and Energy, Rodolpho Tourinho Neto, on 15.12.1999, created the CCPE (Electric Power Industry's Planning Coordinating Committee) that will begin to be structured on January 2000 and that will replace the GCPS (Sector Planning Coordination Group). (16.12.1999)

Both Cerj and Light will try to cancel the initial decision that forbids cutting electric energy supply to customers in debt or in case of fraud. These companies affirm that such measure favors debtors and cheaters. (16.12.1999)

Light and Cerj are forbidden to cut the supply of electric energy to indebted customers as well as of householders with proven irregularities. (14.12.1999)

The impasse about Cemig's share control will have a judicial closure in February 2000, when judges will resume their work after January's recess. (13.12.1999)

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