With Support From Lula’s Government and Energy Sector Unions, Federal Court of Rio de Janeiro Requests Expertise on Eletrobras Privatization Project to Investigate Impacts of Process on Brazil’s Industrialization

The Lula Government and the Union Associations of the Energy Sector Are Opposed to the Company’s Privatization Project. The Federal Justice Determined an Expertise in the Privatization Process of Eletrobras to Investigate a Possible National Deindustrialization.

The Brazilian energy sector is going through moments of instability. After the Lula Government declared itself opposed to the privatization projects of state-owned companies, as well as the request from unions and labor associations, the Federal Justice of Rio de Janeiro determined an expertise in the process of Eletrobras’s privatization. The objective is to verify evidence regarding a possible national deindustrialization caused by the Bolsonaro Government’s project.

Federal Justice of Rio de Janeiro Determines Expertise in the Privatization Process of Eletrobras (ELET3;ELET6)

Eletrobras Privatization Project Faces Risks After Expertise Determination by the Federal Justice of Rio de Janeiro

Initiated during the Bolsonaro Government, the Eletrobras privatization project has been causing discussions in the Brazilian energy sector since 2022, when it was conducted by the former president.

After the new term of the Lula Government began in 2023, discussions about the privatization of Brazilian companies became a topic again, as the new president declared himself opposed to the project initiated in the previous term.

Now, the Federal Justice of Rio de Janeiro has requested an expertise on the project to verify evidence related to a possible deindustrialization in Brazil caused by the concession of the state-owned company.

The decision is from Federal Judge Adriano Saldanha Gomes de Oliveira, from the 28th Federal Court of Rio de Janeiro.

Economist Clarice Ferraz, director of the Strategic Development Institute of the Energy Sector (Ilumina), was appointed to carry out the expertise on the privatization project.

Several Brazilian associations and unions have filed a lawsuit against the National Electric Energy Agency (Aneel) and the Union, warning about the risks of the Eletrobras privatization project to the national industry.

The Federal Justice judge set a deadline of 15 days for the initial presentation of questions about the matter. After that, there will be a period of 10 days for Clarice Ferraz to analyze the case and confirm whether she accepts the position.

Finally, she will have a period of 30 days to present a technical report to the Federal Justice of Rio de Janeiro.

Thus, the company’s privatization project may be put at risk, especially after the statements opposing the action of the current Lula Government.

Unionists Warn of Serious Impacts of the Company’s Privatization on the National Industry in Action Filed in Federal Court

In addition to the Lula Government itself, several unions from the national industry are warning about the impacts of the Eletrobras privatization project on the national market.

“In the present case, the damage may potentially occur in any unit of the federation, given that the sale of Eletrobras is capable of influencing the price of the service provided throughout the country,” warned the authors of the action. “Moreover, it is evident that the sale of Eletrobras could cause harm to the federal treasury; therefore, it is of national scope.”

Conducted during the Bolsonaro Government, in 2022, the privatization of the energy company diluted the Union‘s share to about 40%.

Furthermore, the Union lost its control rights and had its power reduced to 10% in decisions. Thus, the company was practically handed over to the private market by the former president. 

Now, the Federal Justice expertise will finalize the inquiries regarding the Eletrobras privatization project in the national market.