Last week Brazil sold operation rights for all the existing hydropower plants whose concession contracts are about to expire in an auction on Wednesday for 17 billion reais ($4.51 billion).
From the total 17 billion reais to be paid by the auction's winners, 11 billion reais should enter the state coffers in December.
China Three Gorges (CTG) won the rights to operate two major hydroelectric plants, the Brazilian Electricity Regulatory Agency (Aneel) said. The Chinese company managed to win the rights to what was regarded as the best lot.
Enel Green Power (EGP) was awarded a 30- year concession for two operating plants with a total installed capacity of 40 MW in Brazil, following the auction.
Brazil's regional utility Companhia Energetica de Minas Gerais (Cemig) was also a standout in the auction, after agreeing to spend 2.21 billion reais for the operation rights for 18 hydropower plants.
Cemig said it is evaluating an offer of a credit line from a pool of banks led by Banco do Brasil to help it finance the deal.
The two hydro power plants won by EGP are Paranapanema (32 MW), located in São Paulo state, and Mourão I (8 MW), located in Parana state, and together they are able to generate approximately 270 GWh per year. The two facilities are supported by 30-year supply contracts which provide for the sale of 70% of the energy generated by the two plants to a pool of distribution companies, while the remaining 30% will be sold on the free market, as per auction rules.
EGP will be investing more than 160 million reais (approx. US$40 million) for the concession and will be in charge for the operation of the plants over the next 30 years.
The CTG will operate Ilha Solteira and Jupia plants, the two largest of 29 plants on offer, and inject 13.8 billion reais ($3.7 billion) into the government's coffers.
The two plants, located between the states of Sao Paulo and Mato Grosso do Sul, were being operated by the Sao Paulo Electric Company.