May 31, 2019 / 3:59 PM / 2 months ago

Shares of Brazil's Eneva up on state power supply contract

SAO PAULO, May 31 (Reuters) - Shares in Brazilian energy firm Eneva SA shot up over 5% on Friday after the company won a major contract to supply energy to the Brazilian state of Roraima, which has experienced power cuts due to Venezuela’s economic crisis.

Brazil’s government awarded contracts representing nominal power capacity of 293.8 megawatts and investments of 1.62 billion reais ($412 million) to build a natural gas plant in Roraima, which is located on the Venezuelan border.

Roraima is not connected to Brazil’s national grid, making it dependent on Venezuela for power. A string of outages have hit the state in the past year and forced it to rely more on costly generators.

Eneva was among the winners in Friday’s auction, according to Brazil’s CCEE, an electricity regulator.

Under Eneva’s contract, the firm is set to produce energy via the UTE Jaguatirica II power plant, to be constructed in Boa Vista, the capital of Roraima, the firm said in a filing. Natural gas will be supplied via Eneva’s Azulao natural gas field in the Amazonas Basin.

Eneva’s Brazil-listed common shares were up 5.5% in midday trading. Brazil’s benchmark Bovespa index was up 0.3%.

$1 = 3.93 reais Reporting by Luciano Costa Writing by Gram Slattery Editing by Paul Simao

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