Brazil postpones publication of electric power prices for 90 days

Brazil's government has published a presidential decree postponing for 90 days the publication of electric power prices to be used in the Proinfa renewable power sources program.
The Proinfa program requires federal power company Eletrobras to buy 3,300 MW of electric power from three sources of renewable power: small-scale hydroelectric, biomass and wind power. The Proinfa law published in December 2003 states that Eletrobras must sign power purchase agreements before April 29, 2004.

Before Eletrobras can start a tender process for companies to participate in Proinfa, the government is required to publish the prices to be paid for each type of renewable power. The likeliest decision to postpone the deadline is to allow the government more time to come up with its new model for the electric power sector.
In recent weeks government officials have made it clear that current surplus capacity in Brazil gives them some breathing space to restructure the sector before making new investment decisions. But the news is yet another blow to investors relying on the launch of Proinfa to finance their plants and begin construction. Some have been waiting for more than a year.