Understand the impacts and challenges of Eletrobras capitalization

Even with the approval of the capitalization of electrobras by the Federal Court of Auditors (TCU ) on Wednesday (18), the process may still suffer delays and impacts.

According to the analyst CNN Priscila Yazbek, there are still risks that a judicialization of the process will lead to delays in its execution. Opposition to the government has already filed lawsuits to stop the privatization and the arguments presented by TCU Minister Vital do Rêgo, the only opposing vote, should provide arguments for these actions.

If the judicialization is prolonged, the capitalization could pass to the election period running the risk of being barred due to stronger political interference, in addition to suffering the consequences of a fall in shares due to the effects of the elections on the market.

Already in relation to electricity bill Yazbek states that the effects of Eletrobras’ capitalization in the short and medium term should be different.

In 2022, the expectation is that the process will contribute to reducing the bills, since, of the R$ 70 billion foreseen with the privatization, R$ 5 billion will be allocated to the Energy Development Account (CDE). The CDE is paid by all consumers on the electricity bill, financing projects in the energy sector.

Even so, Eletrobras’ contribution should not generate an effective drop in the accounts. The reason is the need to carry out readjustments due to suspensions in 2020 and 2021 with the pandemic and the water crisis . The expectation is that the increase will be 20%, while the capitalization will reduce the accounts by 2.5%. I.e, the balance is still rising for consumers .

In the medium and long term, the projection is that the capitalization of Eletrobras will contribute to an increase in electricity bills. The reason is the existence of the so-called tortoises in the provisional measure (MP) with the elements of the process.

The tortoises are projects that have nothing to do with capitalization itself, but are included by parliamentarians. The main one is the obligation to contract 8 thousand megawatts (MW) of energy generated by thermal power plants gas stations that must be installed in the Midwest and North regions.

For this, it will be necessary to carry out, first, an auction for contracting the generators of this energy, in addition to building the plants. After that, it will be necessary to build a system of gas pipelines to transport the generated energy, since today there is no demand in the determined regions.

“There is no way to estimate the size of the increase [na conta de luz]because there are other projects and forecasts that have nothing to do with capitalization itself and will burden the electricity bill”, says Yazbek.

The analyst of CNN recalls that Eletrobras represents 20% of the energy sector in Brazil, and that, if the capitalization process is poorly executed, it would negatively affect the sector as a whole. The risk, in this sense, is that political rather than technical choices along the way end up harming consumers.