With capitalization, Eletrobras investment potential reaches R$ 13 billion per year

In order to improve its efficiency and performance, a series of measures can be taken by Eletrobras after its capitalization, approved on Wednesday (18) by the Federal Audit Court (TCU).

Currently, the company invests R$ 3 billion per year, which is not enough to cover the amortization and losses that the company suffers. Sources consulted by the Economics analyst at CNN Thais Herédia at the Ministry of Economy and infrastructure specialists point out that, with the privatization of the company, this number could rise to BRL 13 billion .

Furthermore, currently, each of Eletrobras’ subsidiaries has its own board of directors and board. According to Herédia, this format does not exist in any private holding company on the market, and must be restructured with capitalization.

This reduction in operating costs can bring greater efficiency to its investments, both for the energy generation and transmission sectors, where it operates most.

Finally, there is the possibility of expanding into renewable energy, which is the essence of Eletrobras’ operation, as it is based on hydroelectric plants. This would push Brazil to the frontier of the transition to green energy.

Herédia says that these assumptions need to happen in full in order to materialize, otherwise they will not happen either in the time or intensity necessary to improve the company’s operation.

About capitalization

With the approval of the TCU this Wednesday, the government expects to offer the company’s shares by July, without inserting the capitalization in the electoral window from the second half of the year.

However, this endorsement is not the end of the story. There were 7 votes in favor and one against, by Minister Vital do Rêgo. The technical arguments used by the minister should be used in an attempt by the opposition to legalize the project and delay it, getting as close as possible to the election period, according to Bernardo Pedretti, a lawyer specializing in public law.

This would bring new risks and practically make the process unfeasible.

FGTS

In addition to capitalization, the TCU also authorized that workers from any sector who have funds in the FGTS (Guarantee Fund for Time of Service) may use up to 50% of the fund to buy company shares.

The mechanism used for this process is the Mutual Privatization Fund, created in 2000, and already used in other cases, such as at Vale and Petrobras.