Eletrobras Accord on Petrobras Debts Coming Soon

Brazil's state-run power utility Eletrobras expects an accord by the end of the month with state-run oil company Petrobras to pay as much as $3.2 billion in overdue fuel bills, an Eletrobras official said late Monday.

Centrais Eletricas Brasileiras SA, as Eletrobras is formally known, has fallen behind in its payments to Petrobras for diesel and other fuels used to power thermal-electric power plants in Brazil's remote Amazon region.

Petroleo Brasileiro SA, as Petrobras is formally known, says the debt is 7.2 billion reais ($3.2 billion) while Eletrobras says the debt is about 4 billion reais ($1.8 billion).

Eletrobras wants to make a 452 million real up-front payment to Petrobras for the outstanding debt and pay 1 billion reais more of the debt in 85 monthly payments, Eletrobras Chief Executive Jose Costa Neto told reporters at an event in Rio de Janeiro.

The rest of the debt would be paid by Brazil's Treasury, a special account known as the CCC used to subsidize higher-cost electricity in remote regions with taxes on consumers in regions with cheaper power.

Reporting by Rodrigo Viga Gaier