Adani, Torrent Power eye Eletrobras’ power distribution firms
Given the limited opportunities in India, Adani and Torrent Power are attracted by Electrobras’ six subsidiaries that are up for sale and supply power to 13 million people in Brazil
New Delhi: At least two Indian companies—Adani Group and Torrent Power—have shown interest in acquiring six electricity distribution firms put on sale by Brazil’s Centrais Elétricas Brasileiras, or Eletrobras, two people aware of the development said.
Given the limited opportunities in India, these firms have been attracted by Latin America’s biggest utility’s six subsidiaries that are up for sale and supply electricity to 13 million people. PricewaterhouseCoopers Brazil is running the sell side transaction process.
According to newswire agency Reuters, the Brazilian government hopes to raise 12.2 billion reais ($3.68 billion) by privatizing Eletrobras, but the project faces open resistance in the Congress.
“Indian firms such as Adani Group and Torrent Power have evinced interest in this opportunity. There is a lot of interest among the Indian firms,” said a person aware of the requesting anonymity.
Another person who also did not want to be named confirmed the development.
These subsidiaries are; Companhia Energética do Piauí (CEPISA), Companhia Energética de Alagoas (CEAL), Acre Electricity Co. (ELETROACRE), Centrais Elétricas de Rondônia (CERON), Boa Vista Energia SA (BOA VISTA), and Amazonas Distribuidora de Energia SA (AMAZONAS ENERGIA). These firms supply electricity across the six states of Acre, Alagoas, Amazonas, Piauí, Rondônia and Roraima.
Queries emailed to Adani Group and Torrent Power spokespersons on 28 March remained unanswered. Queries emailed to Eletrobras also remained unanswered.
Reuters reported on 28 March quoting Eletrobras chief executive Wilson Ferreira Jr. that Brazil’s largest power company, in two weeks, will release terms, including minimum prices, for the sale of its stakes in power generation and power transmission projects in the country.
While queries sent to PricewaterhouseCoopers Brazil on 28 March remained unanswered, a PwC India spokesperson declined comment.
Adani Group has been eyeing the electricity distribution space. In one of the largest transactions in the Indian power distribution sector, Adani Transmission Ltd announced the Rs18,800 crore deal for acquiring Reliance Infrastructure Ltd’s Mumbai power business in December.
Also, Torrent Power had evinced interest in acquiring Central Electricity Supply Utility of Odisha (CESU Odisha) which supplies electricity to around 2 million consumers in the distribution circles of Bhubaneswar, Cuttack, Paradeep and Dhenkanal., Mint reported on 25 January.
Industry experts caution that entering a foreign electricity distribution market is not an easy task.
“Given the laws, regulation and the ground complexities involved, power distribution sector is not an easy task. More so, in a foreign country,” cautioned the Mumbai-based chief executive officer of a power company, requesting anonymity.
India’s clean energy firms have also been looking at distribution assets to diversify across the electricity value chain to derive better value, given the uncertainties surrounding India’s renewable energy industry.
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