Petrobras increases ownership of Fafen power plant to 100 %

Dec 17, 2004 01:00 AM

Brazil's federal energy company Petrobras has agreed to buy the 80 % of the 133 MW Fafen gas-fired power plant it does not already own from Portugal's state power company EdP for 96 mm reais ($ 35.4 mm), the two companies said in separate statements.
Taking a 100 % stake in the plant is part of Petrobras' strategy to reduce losses in gas and power from take-or-pay gas supply contracts. Fafen was EdP's only thermo plant in Brazil, and did not fit in with the company's strategy of focusing on distribution and hydroelectric generation.

EdP and Petrobras joined forces to build Fafen as part of the government's emergency thermoelectric emergency program in 2001 as the country faced a power shortage. The lack of regulations and a shortage of gas supplies led to losses for both partners.
Fafen is located in the Camacari petrochemical complex in the north-eastern state of Bahia. In early 2005, it will start supplying some 22 MW and 42 tons/hour of steam to the Fafen fertilizer plant, Petrobras said.

The generator has also signed contracts to sell 100 MW to EdP power distributor Bandeirante. Petrobras should pay 50 % of the amount in 30 days and the rest in two equal payments in 2006 and 2007.
EdP will spend the money from the sale on the conclusion of the 450 MW Peixe Angical hydro project in which it has a 60 % stake and federal power company Furnas has the other 40 %.

Source: Business News Americas
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