BNDES Says Angra 3 Nuclear Plant Project Will Be Canceled If Eletrobras Is Not Privatized

So far, about 67% of the civil works of the plant have been executed, but the president of BNDES warns that the works may be canceled.

The privatization of Eletrobras has been strongly discussed this week. On Thursday (07), the Minister of Economy, Paulo Guedes, used the war in Ukraine to defend the transfer of the public company to the private sector due to the geopolitical risk of energy security. Then it was the turn of the president of the National Bank for Economic and Social Development (BNDES), Gustavo Montezano, to address the issue bringing a threat: either Eletrobras is privatized or the Angra 3 nuclear plant will be closed.

The alert from the head of BNDES occurred during an event of the Federal Court of Accounts (TCU), which discussed what the capitalization model of the company would be, also on Thursday (7).

For Montezano, if the privatization of Eletrobras fails, there will be no receipt of the concession amounts and even effects on the company’s stock prices, with one being the halt of works on the Angra 3 nuclear plant as a result and, consequently, the closure of the enterprise.

Currently, the works at the Angra 3 plant are at 67%, according to Eletrobras itself. The project is located in the region of Angra dos Reis, in Rio de Janeiro, and has been priced to be Brazil’s third nuclear plant, with a capacity to generate more than 12 million megawatt-hours per year.

Supporters of privatization argue that Eletrobras could have a greater chance of investments if capitalized. The government’s expectation is that the project will begin commercial operation in November 2026.

Works of the Angra 3 plant resumed less than two months ago

In February of this year, the signing of the contract with the consortium formed by Ferreira Guedes, Matricial, and Adtranz was celebrated, which would allow the resumption of the works of the Angra 3 nuclear plant. The construction had been halted in 2015 after corruption allegations, with over R$ 7.8 billion spent. Less than two months later, the threat of project cancellation emerges.

Will society bear the costs of the non-privatization of Eletrobras?

For BNDES president Gustavo Montezano, there is a possibility that Brazilians will once again have to bear the losses if the privatization of the public company is not achieved.

“We will have an Eletrobras with a more restricted investment capacity than if it is capitalized. The company and Brazilian society may have to bear the costs of closing Angra 3”.

Alert Gustavo Montezano – president of BNDES

In addition to the costs with a possible closure of the Angra 3 nuclear plant, there is a chance that the Tucuruí hydroelectric plant in southern Pará will be removed from Eletrobras’ generation platform.

Eletrobras is the target of political debate even before its creation

Eletrobras was proposed in 1954 by President Getúlio Vargas and was only approved 7 years later after going through the National Congress. The project faced significant opposition. Only in April 1961 was it signed by Jânio Quadros.

Eletrobras was only inaugurated on June 11, 1962, in a solemn session of the National Water and Electricity Council (CNAEE), at the Laranjeiras Palace in Rio de Janeiro, with the presence of the then-new president João Goulart.

The institutional reforms and privatizations in the 1990s led to the loss of some functions and changes in the profile of the State-owned company. The company also began to operate in electricity distribution, through companies in the Northeast and North, until it ended distribution activities in 2018.

Source: Eletrobras