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Tuesday, April 13, 2021

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Bolsonaro threatens electricity companies in Brazil and puts Iberdrola at risk

The Spanish company has a strong presence in the country through its subsidiary Neoenergía.
One day after announcing the appointment of General Joaquim Silva e Luna as head of the public oil company Petrobras, the president of Brazil, Jair Bolsonaro, has gone further by announcing his intention to “stick his finger” also in the oil sector. electricity. Something that could put Spanish companies like Iberdrola in trouble.

“We are going to put our finger on electricity, which is also another problem,” the Brazilian president said on Saturday, according to local media. Intentions that he did not specify more, although it is possible that he will do so in the next few days as he has done with Petrobras.

It should be remembered that Spanish companies such as Iberdrola have a strong presence in the country. In this case, the company operates through its Brazilian subsidiary Neoenergía, which is listed on the Sao Paulo Stock Exchange.

Iberdrola already manages a 640,417 kilometer distribution network in Brazil, covering a population of 34 million people. It has more than 3,500 renewable megawatts (MW) in operation and provides electricity service to 14.1 million customers.

In addition, at the end of 2020 it expanded its presence with the acquisition of the Brazilian distributor CEB-D for 399 million euros. Recently, a new electricity grids project in Brazil was also awarded in the auction of electricity transmission lines.

Sánchez Galán’s group will also build its first two solar generation parks in Brazil, which will add 149.3 megawatts (MW) of power and will involve an investment of 457 million reais (about 73 million euros).

Changes at Petrobras

These statements come just after the Brazilian president announced last Friday the appointment of General Joaquim Silva e Luna, former defense minister and current director general of the Itaipú Binacional hydroelectric plant, as Roberto Castello Branco’s replacement as president of the state oil company.

The decision to change the president of Petrobras reinforces the military presence in key positions in the Brazilian administration and increases fears that the president wants to intervene in the state company to contain the rise in the price of fuel.

It is precisely this last point that has triggered the change of direction in the state companies. The continuous increases in fuel prices have led the trucking sector to threaten a new strike like the one that virtually paralyzed the country in May 2018.

“There are three aspects in the current situation that must be taken into account: the appreciation of oil and the dollar, the interest of the investor, who is looking at the price of shares, and also the interest of the country and the Brazilian who needs to move and fill your vehicle, ”Silva e Luna pointed out in local media.

However, the appointment of Joaquim Silva e Luna will have to be ratified by the company’s Board of Directors to be effective.

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