2 Min Read
SAO PAULO, April 19 (Reuters) - Senators and lower house lawmakers representing Brazil's state of Minas Gerais have joined forces to help Cia Energética de Minas Gerais SA lobby for the renewal of four hydropower dams whose licensing rights expired recently, two people with direct knowledge of the situation said on Wednesday.
Former presidential runner-up Aécio Neves and Antonio Anastasia, both senators representing Minas, will lead efforts to renegotiate renewal of the São Simão, Miranda, Jaguara and Volta Grande dam licenses for Cemig with the National Treasury and other federal bodies, said the people, who asked for anonymity to discuss the matter.
Cemig, controlled by the Minas Gerais state, needs to regain control of the dams to rein in rapid debt growth. Debt tripled since 2012, when a federal government decision to renegotiate power contracts dented the value of electricity assets and hampered project returns.
The utility has incurred heavy losses and cut capital spending for this year to cope with loss of the dams. Minas Governor Fernando Pimentel and archrivals Neves and Anastasia will work together to facilitate renewal of the dam licenses with the federal government for 20 years, the people said.
One alternative would involve using two Cemig subsidiaries to pay a 3 billion reais ($966 million) tranche of the licensing fee, one of the people said. The rest of the money would come from Cemig and could even involve offering a stake in the dams to the federal government, the same person added.
Press representatives for Neves and Anastasia confirmed their engagement on the renewal plan, without elaborating. Cemig did not have an immediate comment.
Preferred shares, Cemig's most widely traded class of stock, gained 0.2 percent on Tuesday. Expectations of a renewal of the dams and faster asset sales have bolstered the stock 22 percent this year. ($1 = 3.1071 Brazilian reais) (Editing by David Gregorio)