Brazil Attracts Investors to Power Transmission Auction

The Brazilian government awarded licenses for companies to build and operate 6,126 km (3,829 miles) of power transmission lines, finding investors for 21 of 24 lots offered in an auction on Friday.

It was the best outcome for a licensing round of that type since 2012. Brazil's electricity regulator Aneel, which organized the auction, estimates the new licenses will require investment of 11.6 billion reais ($3.61 billion).

Local group Equatorial Energia SA was a featured player, snapping seven lots. The company controls two power distribution firms and two large oil-fired thermal power plants in northern Brazil. It has no prior presence in the power transmission sector.

Among other active investors were Canadian asset manager Brookfield, which won three lots in partnership with Spanish company Cymi, and energy firm Cteep, controlled by Colombian holding company ISA.

Chinese company State Grid, which had been active in previous rounds, refrained from bidding.

Brazil's state-run power holding company Centrais Elétricas Brasileiras SA, or Eletrobras, was also on the sidelines as its management is looking to downsize and to reduce debt.

Brazil's electric power secretary Fábio Lopes Alves said new conditions set by the government for that type of investment, with improved returns, were key to attracting a larger number of investors.

A detailed table with all lots offered and companies awarded licenses can be seen at Aneel's website (www.aneel.gov.br).

($1 = 3.205 Brazilian reais)

(Reporting by Luciano Costa; Additional reporting and writing by Marcelo Teixeira; Editing by James Dalgleish)