Angra 3 Nuclear Plant Is Getting Closer to Resuming Operations

The Ministry of Mines and Energy (MME) announced that the government expects to define by June the business model that will be adopted for the completion of the Angra 3 power plant.

The Angra 3 tender, the most complicated project in Brazil that led to Temer’s imprisonment, is set for the end of this year. Angra 3 is managed by Eletronuclear, a subsidiary of Eletrobras. The project, which has been a white elephant in the Brazilian energy landscape, had been stalled since 2015, long before Temer’s imprisonment, when the project was already under the sights of Lava-Jato, and the president of Eletronuclear, Othon Luiz Pinheiro, was arrested. The corruption schemes involving the Angra 3 plant go further; in another case, the Federal Court of Accounts (TCU) prohibited the construction companies Queiroz Galvão, Empresa Brasileira de Engenharia, Techint Engenharia e Construção, and UTC Engenharia from signing public contracts due to fraud in Angra 3 bids.

The president of Eletronuclear, Leonam Guimarães, stated that the government will decide by June the business model for resuming the works of Angra 3, according to him, the definition of the model will occur after conducting a survey with international companies about the business alternatives for the completion of the plant. According to Guimarães, in relation to potential partners, he said that three companies from China, one from the United States, one from France, one from South Korea, and one from Russia are interested.

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According to the executive, there are several business models that could be adopted for the completion of Angra 3. One possibility, according to Leonan, is the corporate model with minority participation of the private partner in Eletronuclear. There is also the EPC model, whereby someone builds the plant and receives investments throughout its useful life, under the energy sale contract. There could also be the possibility of creating a Special Purpose Vehicle (SPV), under which the investor, also a minority, would complete the construction and then be one of the partners of this SPV, which would be restricted to Angra 3.

The Minister of MME Bento Albuquerque intends to include the plant as a priority project of the Investment Partnership Program (PPI). Created in 2016 by the government of Michel Temer, the PPI not only manages concessions but also handles partnerships with the private sector. The partnership suggested by the Minister of Mines and Energy would be limited to the works to complete the nuclear project, and would not grant the plant to the private sector.

According to Leonan, to complete the works of Angra 3, R$ 15 billion will be needed. These funds will come from financing by the partners who will participate in the works. The expectation is that the works will be completed by 2026. If the government decides not to complete the works of the plant, around R$ 12 billion will be needed.

The resumption of the works has been defended by Bento Albuquerque.
“It is a priority project of the government. The next step is for it to be included in the Investment Partnership Program. We think this depends on a meeting of the PPI council which only needs to schedule the date. There, Angra 3 will be considered a priority project of the PPI”, declared Bento Albuquerque on March 21. The forecast is that the meeting will take place by April 10.

According to the Minister of Mines and Energy, the expectation is that the works of the plant will be resumed at the beginning of the second half of this year, which would allow completion by 2026.

With the preliminary license from Sterlite for the transmission line in the North region of Brazil, the purchase of Amazonas Energia by the Oliveira Energia/Atem Consortium approved by Cade, and the application of R$ 202 million by Energisa in 2019, the energy market in Brazil has a promising future.