China to pay Brazil $3.7 Bn to Run Hydroelectric Power Plants

November 27 2015

A state-owned power company, China Three Gorges, agreed on Wednesday to pay Brazil’s federal government 13.8 billion reais, or $3.7 billion, for the rights to operate two massive hydroelectric power plants for the next 30 years.

China Three Gorges made the commitment during a government auction of 29 operational power plants whose concession contracts have expired.

The $3.7 billion payment to operate the plants was fixed. The auction’s winner was the company that promised, after paying that sum, to sell electricity to consumers at the lowest price, but China Three Gorges was the only company to bid on these two plants. “There weren’t other bidders because of the way the government organized the auction,” said Claudio Sales, president of Instituto Acende Brasil, an electricity sector think tank in São Paulo. “Fully operational hydroelectric plants with consumer contracts are attractive assets.”

source NY times

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