Investors looking into the Brazilian energy market will find
that despite the unfavourable global financial market,
opportunities abound for investment in the Brazilian energy
Looking at the global market, a noticeable trend is the
migration of energy-intensive industries to developing
countries. This is due to a number of factors such as cost of
labour and land, social license and environmental restrictions,
logistics and available resources.
In Brazil, electricity consumption is on the rise due to an
increase in industry production to service both international
and local markets. As a result of sustained economic growth
over past, inflation control and social inclusion programmes,
more and more people are becoming consumers. Existing consumers
are also raising their expenditure levels and buying new
products, which require more energy to produce, and consuming
more energy at home with goods such as televisions, computers
and air conditioners. Increase in Brazil's GDP, population, per
capita consumption and the rise in corporate investment due to
a more predictable and stable environment have resulted in a
constant increase in energy demand by the industrial
According to Brazilian government estimates, an investment
of R$142 billion is required in energy generation between 2009
and 2017, of which R$79 billion is for projects that have not
yet been auctioned. Brazil needs to expand its installed
capacity to 155,000 mw by 2017, an increase in 54,000 mw from
current capacity, of which 16,000 mw have already been
Increasing energy production requires not only new energy
projects, but also new transmission lines. Many new projects
are being auctioned in remote parts of the country where
transmission is almost as large an undertaking as constructing
the power plants themselves. By 2017, Brazil will require
36,387 km in transmission lines and 71,357 mva in
To add to this favourable market, the Brazilian government
has launched a growth acceleration programme called Programmea
de Aceleração do Crescimento (PAC) seeking to
strengthen the Brazilian economy by means of heavy government
and private investments in infrastructure. Energy is one of the
cornerstones of the PAC, and as the programme also happens to
be part of the political platform for President Luiz
Inácio Lula da Silva, candidate in the 2010 presidential
election, no effort is being spared to ensure the project takes
off. Actual disbursements of funds are not progressing at the
speed the central government would have wished for, but the
incentive is there for companies wishing to invest in
infrastructure in Brazil in the near future.
The current project portfolio and unique features of the
Brazilian market offer unrivalled opportunities for investors,
equipment suppliers and engineering procurement contracts (EPC)
in the energy sector.
The Brazilian energy market
Brazil faced a severe energy crisis from 2000 to 2001 as a
result of inadequate planning, over-dependency on hydropower
(which at that time accounted for 95% of the energy generation
matrix) and a drought period.
The government was forced to implement energy rationing
measures to impact energy consumption for years. The energy
crisis led to a decline in GDP growth in Brazil from 4.3% in
2000 to 1.3% in 2001. Energy consumption levels subsequently
took five years to return to pre-rationing levels.
In order to avoid future energy crises and improve long-term
planning, in 2004 the Brazilian government introduced a new
regulatory model for power generation in Brazil, named the New
In accordance with New Model regulations, most new power
projects participate in auctions organised by Agência
Nacional de Energia Elétrica (ANEEL), the electric
energy agency, for long-term power purchase agreements (PPAs)
with energy distributors, who are required to enter into
long-term contracts for 100% of their demand via a reverse
auction system. More importantly, these long-term PPAs were
aimed at providing sufficient cash flow certainty to allow the
financing of these projects using project finance
Under the auction system, there are specific auctions for
existing energy and for new energy to be delivered in three or
five years. Within the new energy auctions, there are specific
auctions targeted at certain energy sources, such as an auction
targeted at biomass sources (mainly sugar cane bagasse) held in
2008, and an auction to take place in 2009 exclusively for wind
In addition, as a result of the auction structure, new
energy projects do not compete with existing projects for
long-term contracts, and are able to charge higher tariffs.
Most new energy projects participate in these auctions, and
consequently may be awarded long-term PPAs well before they are
due to start operating, thereby ensuring a predictable cash
flow which facilitates project finance structures.
In the New Model, energy can also be traded in the Ambiente
de Contratação Livre (ACL), the Brazilian spot
market equivalent, subject to certain requirements. Certain
large consumers are able to enter into contracts in the ACL,
and therefore some power projects can benefit from both a
long-term PPA and short-term contracts with the so-called free
consumers. Large hydropower plants, for example, are currently
allowed to sell 30% of their power generation in the ACL.
The Brazilian energy matrix
The installed capacity of the Brazilian power sector is just
over 100,000 mw. In 2008, hydropower accounted for 73.1% of
Brazil's electricity generation. Electricity imports accounted
for 8.6%, natural gas accounted for 6%, biomass 4.8%, oil and
oil by-products 3%, nuclear 2.8%, coal and coal by-products
1.6% and wind power 0.1%.
While a largely renewable energy matrix is a source of pride
for Brazil, the lack of diversification in the energy matrix
has already shown its consequences.
Nevertheless, the most significant investments as of 2009
are precisely in hydropower plants, namely the Santo Antonio
and Jirau projects (under construction) and the Belo Monte
project expected to be auctioned in 2009. Given Brazil's huge
potential for hydro generation and the installed construction
capacity, the trend is for continued investment in
On the other hand, both government and industry are aware
that relying on hydropower alone is risky, and concerns have
been raised about delays in the completion of large hydropower
plants mainly due to environmental issues during the
Moreover, despite increased investment in hydropower,
storage capacity has not expanded, as environmental concerns
mean that hydro projects are being built with less storage
capacity than in the past. Therefore, these projects are still
exposed to rain level risks.
Environmental barriers to new hydropower projects are being
slowly lowered, as there has been significant political
pressure on environmental agencies to reduce lead times to
review licensing applications, especially for projects enrolled
in the PAC programme. However, there are still delays and
regulatory uncertainty regarding licensing aspects. As a
result, many investors are seeking to develop projects based on
other energy sources.
Recently, coal power plants have become a focus of interest
to many investors, as they are being seen as a viable
alternative for larger projects.
Other sources such as gas, wind and nuclear power are also
promising, with a number of relevant projects on the horizon
including the construction of the 1.300 mw Angra 3 nuclear
power plant after a 23-year interruption.
Main energy sources in Brazil
Brazil's potential for hydropower generation is estimated at
approximately 260 gw, of which only 30% are currently being
used. 40% of Brazil's hydropower potential is in the Amazon
Clearly, there is still significant potential for the
development of new hydropower projects, but developing large
hydro projects in remote areas poses a number of
Traditionally, hydropower projects in Brazil involved large
dams to allow multi-annual storage and flow regulation, but due
to the environmental constraints, small, run-of-the-river hydro
projects are becoming increasingly popular in Brazil.
Most of Brazil's available large hydro potential is located
in remote regions. The most important large hydropower projects
are being built in these areas, which entail not only technical
complexity arising from large scale construction far from
larger cities, but also transmission difficulties and the need
to grapple with issues such as environmental protection,
neighbouring indigenous populations and endangered species.
Successful implementation of these projects hinges on the
availability of exceptional project management skills, careful
planning and monitoring of all licensing aspects and close
contact with government and local community
Developers of large hydro projects need to ensure that they
comply fully with the intricate licensing requirements at the
municipal, state and federal levels, which sometimes give rise
to issues relating to overlapping authority and conflicting
The 1,087 mw Estreito power plant, 3,150 mw Santo Antonio
plant and the 3,300 mw Jirau plant, all in the Amazon region,
have faced a number of licensing difficulties and lawsuits
seeking to suspend the projects due to environmental concerns.
However, construction is now reportedly on schedule for all
three projects, and Jirau and Santo Antonio have announced that
the projects may be completed ahead of schedule.
Among the planned projects to expand Brazilian energy
production, the 11,000 mw Belo Monte hydropower plant, expected
to be auctioned by the end of 2009, is certainly the most
impressive. The Belo Monte power plant will be the largest
power plant in Brazil after Itaipu.
Other planned hydro projects expected to be auctioned by the
Brazilian government in the near future are the 1,328 mw Serra
Quebrada power plant, the 1,080 mw Santa Isabel power plant,
and five power plants in the Rio Tapajos Complex, totalling
Small hydro projects are becoming increasingly popular in
Brazil, especially run-of-the-river projects. Small hydropower
plants offer the benefits of hydro generation, but can be
installed closer to larger cities and involve smaller
reservoirs. However, these smaller reservoirs mean that energy
production by these projects may be hindered by drought
Small hydropower plants of up to 30 mw have benefited from
government incentives, and therefore have been a popular choice
for companies investing in renewable energy, in several cases
for self-consumption. There is a push to extend the benefits
granted to small hydro projects to projects with up to 50 mw
In the 2009 A-3 auction, 31 small hydro projects enrolled,
offering 390 mw of installed capacity.
Thermal generation power plants
Thermal generation power plants remain popular in Brazil as
a viable alternative to diversify the Brazilian energy matrix.
Heavy reliance on hydro generation has had adverse consequences
in the past, and other renewable energy sources are not yet
competitive from a price perspective.
Thermal power plants are relatively quick to build and tend
to enjoy a competitive advantage in the A-3 auctions (for
delivery of energy within three years from the auction).
Therefore, there are still plenty of opportunities for
thermal generation projects to be awarded long-term contracts
under government sponsored auctions, especially considering the
relatively fast construction, predictability and operation
The development of clean coal technologies, low coal prices
and the ability to build large scale projects in shorter time
frames than equivalent sized hydropower projects have provided
an incentive to coal fired power plants.
Brazil has the tenth largest coal reserves in the world, but
coal production is under-developed. Companies investing in
large-scale coal projects are entering into long-term off take
agreements with coal suppliers either in Brazil or abroad to
ensure that the project has a guaranteed supply of coal. An
increase in coal power generation would boost Brazilian coal
Among relevant coal projects, in July 2009 MPX Energia and
EDP Energias do Brasil secured over $1 billion in financing for
the 720 mw Pecém I coal-fired power plant in the state
of Ceará provided by BNDES and an international
syndicate led by the Inter-American Development Bank.
Other coal power plants in MPX's pipeline are the 2100 mw
Porto do Açu power plant in the State of Rio de Janeiro
and the 600 mw UTE MPX Sul in the State of Rio Grande do
Vale has also announced plans to build a 600 mw coal-fired
power plant in Barcarena, State of Pará, which should
require approximately $900 million in investments.
Tractebel, in its turn, is planning to build a 540 mw power
plant in Seival, which could be used to export energy to
neighbouring Uruguay or participate in one of the Brazilian
According to the Brazilian Ministry of Mines and Energy,
coal-fired energy production is expected to increase from the
current 1,400 mw to 6,500 mw in 2030. Given current industry
plans, however, the Ministry's estimate may prove to be
During the Brazilian energy crisis of 2001, oil-fired power
plants featured prominently in the government's emergency
As they are fast to build, oil-fired power plants continue
to play a significant role to meet shorter-term demands within
the Brazilian energy matrix.
However, some existing plants have been required under the
terms of their PPAs to convert to gas operation, and a growing
trend is the construction of bi-fuel power plants that can run
on gas or oil.
Many gas-fired power plant projects faced supply issues in
the past, which negatively affected the reputation of gas-fired
power plants in Brazil. The well publicised disputes with
Bolivia have brought additional uncertainty.
As a response to Bolivian gas supply issues, Petrobras has
increased investments in gas production and transportation.
When gas from the Santos Basin is made available, Brazil should
have abundant quantities of gas available on the national
market. Market sources expect that the Santos Basin could
produce up to 100 million mw per day of natural gas. Investment
in gas pipelines should also help expand the national gas
supply, which are already stimulating new gas-fired power
projects, but uncertainty remains as to short and medium term
availability of natural gas.
Nevertheless, gas was the fastest growing energy source in
2008. In the 2009 ANEEL A-3 energy auction, 54 out of 119
enrolled projects were gas-fired, and total 11,344 mw installed
capacity, as compared to eight oil-fired projects offering
1,477 mw capacity.
Gas-fired projects are suitable for larger installed
capacity, and are therefore a viable alternative to coal and
hydropower. As an example, MPX Energia has revealed plans to
build a 3,300 mw gas-fired power plant in the Porto do
Açu industrial complex.
It is possible that once abundant gas becomes a reality,
gas-fired power plants may acquire a significant role in the
Brazilian energy matrix and become a strong competitor to coal
energy generation. However, while gas-fired plants are
friendlier on the environment, coal is likely to continue to be
a cheaper source of fuel. It remains to be seen whether
environmental concerns or price will have the upper hand.
Biomass-fired power plants using sugar cane bagasse are the
next big thing in the renewable energy sector in Brazil.
Brazilian ethanol, produced from sugar cane, is more
efficient and less polluting than corn-based ethanol. The
Brazilian government has sponsored the expansion of ethanol
markets in Brazil and as a result of government incentives and
lower prices compared to gasoline, more than 90% of new cars
manufactured in Brazil are flex-fuel and can run on ethanol,
gasoline or any combination of the two.
Ethanol production has surged to cater to growing internal
demand and exports to ethanol-friendly countries such as Japan.
Green fuel policies in a number of countries portend huge
potential for the ethanol trade, and the ability to use sugar
cane bagasse, which would otherwise go to waste, to run
co-generation facilities is an excellent way to reduce
production costs, create extra revenues for ethanol and sugar
producers with the sale of any energy surpluses, reduce waste
and generate energy from a renewable source. However, it is
worth noting that as bagasse is a by-product of the sugar and
ethanol industry, its availability is affected by the
fluctuations of sugar and ethanol in the international
commodities market. This may be especially relevant in projects
primarily aimed at energy generation.
A very large number of sugar and ethanol producers have
started to invest in energy generation as a significant element
of their business plans, not just as a sideline activity.
In 2008, the Brazilian government held a biomass-only energy
auction in which 2,379 mw were traded. In 2009, as there will
not be an auction specifically targeted at biomass sources, 20
sugar cane bagasse-fired projects have enrolled in the standard
A-3 auction to be held by ANEEL, offering 995 mw capacity.
Several ethanol producers have turned to BNDES for financing
to install or expand energy co-generation facilities.
However, sugar and ethanol producers were severely hit by
the global financial crisis with falling commodity prices. Many
producers were caught unprepared and are now facing liquidity
issues. Some have gone bankrupt, others are seeking to attract
strategic investors, and others are cash-strapped.
As a result, financing for sugar cane bagasse co-generation
projects is harder to come by at the moment as financiers are
weary of potential insolvency risks of sugar and ethanol
On the other hand, sugar and ethanol producers have become
targets for private equity investors and M&As, and the
crisis may help consolidate the Brazilian sugar and ethanol
market into larger players.
These larger players are in general still able to access
financing sources successfully.
In January 2009, BNDES approved a R$392 million financing to
Bioenergética Vale do Paracatu (Bevap) for construction
of a sugar cane processing facility for ethanol production and
energy co-generation with 80 mw installed capacity in the state
of Minas Gerais.
In February 2009, Inter-American Development Bank disbursed
$153 million in loans for the construction of two ethanol
production and power co-generation facilities in Brazil.
In June 2009, BNDES approved a $788 million financing for
Cosan, a major ethanol producer, for ethanol production and
Investment in wind farms began in earnest in Brazil with the
2002 Programme of Incentives for Alternative Electricity
Sources (PROINFA), a programme for incentive of renewable
energy sources. The PROINFA was aimed at small hydro, wind and
Wind energy prices are still not competitive compared to
other energy sources, which is why specific incentives are
required for this industry to develop in Brazil, but with one
of the most consistent wind patterns in the world for energy
generation, wind power projects are expected to become
increasingly popular and production costs should diminish over
time. According to official estimates, Brazil has 143 gw in
wind power potential. However, experts say that actual
potential may be as high as 300 gw.
The PROINFA auctioned 1,443 mw of wind energy PPAs for 54
projects, but a 60% local content requirement at a time when
there was only one turbine manufacturer in Brazil and
uncertainties regarding certain aspects of the PPA such as the
sale of carbon credits led to mixed results in the
implementation of projects.
Another factor is that the PROINFA fostered the entrance of
new players in the energy market, with a relevant portion of
the available contracts being awarded to companies that were
not related to existing concession-holders. The outcome of this
initiative was that some of companies that were awarded PPAs
lacked the resources or the expertise to carry the projects
through to completion, or had difficulties financing the
As a result, out of the 54 projects that were awarded PPAs
as of January 2009 only 17 of those projects, representing 456
mw were operating, 15 projects totalling 324 mw were still
under construction, and the remainder had not even commenced
The government has changed its tactics, and the wind-only
auction set to take place in 2009 is expected to be a success.
More than 13,000 mw in 441 projects have been registered for
the auction, and many projects are led by large players in the
energy field, which have the expertise and credit relationships
required to succeed in obtaining financing for the projects.
Most projects registered for the 2009 auction range between 25
and 50 mw, but there are six projects with more than 100 mw
capacity, totalling 806 mw among them.
Local content requirements have been watered down,
recognising that existing local production (two turbine
manufacturers only, Wobben and Impsa) is not capable of
supplying all market participants, but clear incentives are
being laid for manufacturers in the wind industry to settle in
Brazil in anticipation of an ever growing local wind power
The government has announced that auctions targeted at wind
energy generation are here to stay, which is excellent news for
investors and equipment suppliers.
Solar energy seems like a natural choice for Brazil amongst
renewable energy sources, but solar energy generation is still
at a very early stage compared to other alternative energy
sources such as wind or biomass. The cost of equipment is still
very high, and there are no major government incentives
specifically targeted at solar energy like those being
implemented in the US or Europe. The first government
initiatives to foster solar energy are only now being
The government announced in March 2009 that low-income
houses to be built under the PAC programme would have solar
energy panels. The Ministry of Mines and Energy was, as of July
2009, working on a solar energy incentive programme, which
would be integrated with local industry capacity. However, the
extent of these initiatives is still unclear, as is the
question of whether there will be specific tax exemptions for
solar energy panels and how exactly the government is to set
about implementing these programmes.
While solar power generation is not yet widespread in
Brazil, companies are beginning to invest in pilot projects in
anticipation of growing demand and government incentives for
solar power. MPX Energia, for example, has announced the
construction of a one mw pilot solar power plant in the state
of Ceará and is developing partnerships with solar
Brazil has one of the five largest uranium reserves in the
world. Following a global trend, the Brazilian government seems
to be embracing the view that nuclear energy is here to stay,
and should play a role in the Brazilian energy matrix.
Brazil has two nuclear power plants, 650 mw Angra 1 and
1,300 mw Angra 2, both located in Rio de Janeiro. The 1,300 mw
Angra 3 power plant which was part of the original plan is
finally going to be built after a 23-year delay. The
environmental license was issued in March 2009, and
Eletronuclear, the state company responsible for construction,
has requested a R$4.5 billion financing from BNDES (out of a
total R$7 billion investment required to complete the plant) to
resume construction of the Angra 3 plant. Foreign banks have
also been mentioned as potential financing providers.
Government officials have mentioned that nuclear power
generation expansion plans include two nuclear power stations
in Northern Brazil, with six reactors each, and two other
similar stations in Southeast Brazil. Each station would have a
capacity of approximately 6,000 mw. However, a state monopoly
on the entire nuclear production chain, including uranium
development, has limited development of this source.
Brazil's continental size coupled with the fact that the
majority of electricity consumption is in the southeast and
south of Brazil, where most industrial activity is
concentrated, whereas the largest power projects are located in
remote areas, require significant investments in transmission
in order to allow power being produced across the country to
While most of the Brazilian electricity grid is
interconnected in the National Integrated System, a large part
of the northern Brazil is still in an isolated system. One of
the government's priorities is to integrate northern Brazil
into the national grid.
The large hydropower plants being built in remote regions
such as the Amazon basin would be of little use without an
integrated transmission system. In order to integrate the Santo
Antonio and Jirau power plants into the national grid, 2,500 km
in transmission lines will have to be built.
The integration of Manaus, Macapá and other cities in
the Amazon region into the National Integrated System will
require a further 1,810 km in transmission lines. Integration
is expected to be completed in 2012.
By 2017, Brazil will require 36,387 km in transmission lines
and 71,357 mva in transformers. According to Brazilian
government estimates, R$25 billion in investment is required
between 2009-2017 in transmission lines and R$14 billion in
Due to the auction model, transmission projects that are
awarded contracts in the government sponsored auctions have
predictable cash flows and are therefore suitable candidates
for project finance structures.
It is worth bearing in mind, however, that for many of these
projects completion risks will be greater than usual as a
result of the complexities of building transmission lines that
cut through the Amazon forest and other remote regions of the
country. This added complexity should be adequately reflected
in the project financing structure to ensure proper risk
Financing energy projects
BNDES and local development banks are the largest source of
funding for Brazilian energy projects.
Between 2003 and June 2008, BNDES financed 155 energy
generation projects, totalling 19,668 MW of installed capacity,
and more than R$30 billion out of a total of investments
exceeding R$53 billion. Out of these projects, 36 were hydro, 4
thermal, 80 small hydro, 30 biomass and 5 were wind farms.
During this period, BNDES also financed the construction of
more than 10,000 km in transmission lines. Among the largest
financings were R$7.2 billion for the Jirau power plant, R$6
billion for the Santo Antonio power plant (both part of the
Madeira project), R$2.66 billion for the Estreito plant, R$1.66
billion for Foz do Chapecó and R$1 billion for
Simplício, all of them large hydro projects and all
enrolled in the PAC programme.
BNDES also created a bridge credit line in 2008 targeting
infrastructure projects, especially energy, so as to allow
companies to start building while they negotiate long-term
credit facilities, all as part of the government push to
accelerate the implementation of infrastructure projects.
The restraints in access to credit worldwide have affected
but not prevented the financing of infrastructure projects in
Brazil, as the Brazilian development banks have taken on the
role of liquidity providers and have made a point of allocating
resources to infrastructure projects in line with PAC programme
directives. In 2009, BNDES received an additional $100 billion
cash injection to ensure that resources would be available for
Other Brazilian development banks have been active in the
financing of energy projects, but sometimes regional banks lack
the project finance expertise required to structure a
sophisticated project finance structure, which may lead to
delays in obtaining credit approvals.
BNDES on the other hand is used to dealing with
sophisticated project finance structures. BNDES lends either
directly or with a pass-through to commercial banks. Joint
financing by BNDES and international development banks is also
common, especially for larger projects.
Large projects usually involve a syndicate of banks, which
adds a layer of complexity to project finance structures due to
Brazilian law restrictions.
Under Brazilian law, the concept of trusts does not exist
and a mandate structure must be adopted to accommodate the
syndicate agent. As a result, loan documentation is usually
signed by all syndicate members, a factor which creates
additional paperwork every time a change is required.
Another challenge confronting potential investors in the
energy sector is the increasing number of private equity funds
investing in energy projects under fundo de investimento em
participações (FIP) structures, which are
special investment vehicles that benefit from certain tax
incentives. FIPs cannot, as a rule, give guarantees in favour
of invested companies unless they obtain special
However, it is a standard requirement of BNDES project
finance that the shareholders of the debtor pledge the company
shares in favour of BNDES, in addition to other requirements,
such as equity support arrangements and corporate guarantees
prior to project completion.
Another relevant aspect is that under Brazilian law step-ins
are not allowed. A legal restriction exists regarding a
creditor's ability to keep the assets given as a debt guarantee
in case of foreclosure. There is a legal requirement for assets
to be sold to third parties, which necessarily entails some
difficulty when trying to reflect typical international finance
step-in structures in project financings governed by
The solutions that are usually adopted to provide lenders
with a certain degree of step-in rights are powers-of-attorney
and share usufruct structures. These allow lenders to manage
the project until a third-party sale is carried out, as well as
agreements allowing for the assignment of project contracts
away from the debtor in case of a default.
Some lenders also attempt to circumvent legal restrictions
by having the buyer repay the debt in kind (with the project
assets), but said workarounds may be challenged in Brazilian
courts, and we do not have a history of case law on this
In this respect, the Brazilian Public Private Partnership
(PPP) Law, which came into effect in 2004, has introduced a
major innovation in the Brazilian legal system aimed at
facilitating project finance structures for PPP projects, in
that it specifically allows step-ins and explicitly recognises
the fundamental role that financiers play in rendering a PPP
project ultimately viable.
Other peculiarities of the Brazilian legal system that
affect project finance structures include restrictions on
floating charges and burdensome registration requirements for
purposes of perfecting the security package.
As regards energy project finance in particular, it is also
essential to bear in mind that, depending on the regulatory
status of the project, a number of additional restrictions may
apply to the project's ability to give security and to the
lenders' ability to enforce the debtor's obligations.
This article has sought to introduce international investors
to the basic features and prospects for energy generation in
Looking at the broader investment market, Brazil accounts
for close to 50% of South America's GDP. In the recent past,
meaningful investments have been made in logistics to increase
trade within the continent and we have witnessed economic
integration at levels that were unimaginable some 10 years ago.
As the country with the largest and most modern industrial
base, Brazil is expected to benefit from this closer
relationship with neighbouring economies in the coming
In addition, Brazil has significant trade levels with Asian
countries on raw materials, and there is growing interest of
Asian countries in Brazil, as evidenced by ever increasing
investments, especially Chinese, in the Brazilian economy.
We may add that land availability at lower cost, an
increasing internal market, specialised labour with comparable
lower pay, solid political institutions in a consolidated
democracy, including independent regulatory agencies and a
fully operational independent judiciary, a lack of political
conflicts with neighbouring countries, and lack of internal
religious or ethnical conflicts are all elements which,
combined with a favourable attitude towards foreign investment,
help consolidate Brazil's position as a prime destination for
new energy investments. Brazil has also consolidated a culture
of arbitration of commercial disputes during the past six
Investors looking to tap into the opportunities Brazil has
to offer in the energy sector are, however, warned to act fast,
as many of the best investment opportunities are concentrated
in 2009 and 2010.
Pedro Aguiar de Freitas is a senior partner at Veirano
Advogados in Rio de Janeiro and São Paulo
He came back to Veirano in 2009 after more than 20 years,
returning to the firm where he started his career.
Before joining Veirano, he occupied the position of
General Counsel and Secretary to the Board of Directors
of VALE, one of the largest business conglomerates in
Latin America, for six years.
He also held the positions of General Counsel of Brasil
Telecom SA, for three years after its privatisation, and
General Counsel of Organizações Odebrecht
for eight years and Senior Counsel at the International
Finance Corporation IFC for six years. He started
his career with Veirano (which was then the Rio de
Janeiro office of Baker & McKenzie), having also
practiced in Chicago at the Baker & McKenzie
He is a board member of several organisations, including
the Mining Committee of the International Bar Association
(IBA) where he serves as a secretary. He was
vice-chairman and president of Instituto Innovare a
non-political organization dedicated to promote a more
speedy and efficient judiciary in Brazil.
He is also a board member of Amcham, Britcham, CESA and
Fundação Getúlio Vargas.
Pedro Aguiar de Freitas
Av. das Nações Unidas, 12.995 / 18º
São Paulo - SP - Brasil
Tel: +55 11 5505 4001
Fax: +55 11 5505 3990
Ana Carolina Barretto has been a member of Veirano
Advogados since 1997. She specialises in project
development and finance, M&A and other corporate
transactions, focusing mainly on the energy and
infrastructure sector. In recent years, she has
represented sponsors, lenders, contractors, equipment and
O&M suppliers in connection with the acquisition,
development, financing, construction and operation of
power, infrastructure, mining and alternative energy
projects in Brazil.
She gained her Bachelor of Laws degree from the
Pontifícia Universidade Católica do Rio de
Janeiro, Brazil. She also holds a Magister Juris degree,
funded by a Chevening/FCO scholarship, and a Master of
Studies in Legal Research degree from the University of
Ana Carolina Barretto
Av. Presidente Wilson, 231 / 23° andar
Rio de Janeiro Rio de Janeiro Brasil
Tel + 55 21 3824 4747
Fax + 55 21 2262 4247