Brazil has sold hydroelectric power operating licenses for $3.8bn to foreign bidders.

The government sold the operating licenses for four hydroelectric dams in an auction won by Chinese and European bidders for an amount 10.1 per cent above the minimum asking price the government had set.
São Simão hydropower plant
China’s State Power Investment Corp [CPWRI.UL], who favour hydro and wind power investments, will pay $2.24bn (7.18 billion reals) to operate the São Simão hydropower plant, the biggest of the four assets auctioned.

France’s Engie SA acquired the licenses to operate the Jaguara and Miranda dams for a combined sum of $1.1bn (3.53 billion reais). Italy’s Enel Spa won the bid for Volta Grande dam for 1.41 billion reais.

There has been some public dissent to the privatisation of the country’s hydroelectric assets. President Michel Temer is following a privatization strategy as the government attempts to raise money to cut Brazil’s budget deficit.

Planning Minister Dyogo Oliveira said he was pleased with the result of the auction, which was in line with expectations.

Depending on the dam, the bidders paid between 6.5 percent and around 22.5 percent above the government’s minimum price.

Companhia Energética de Minas Gerais previously operated all four dams. Shares of Cemig, as the company is known, fell 1.6 percent to 7.92 reais in early afternoon trading.