Failing economy jeopardises Eletrobras sale

The $8bn privatization of Brazilian electric utility Centrais Eletricas Brasileiras (Eletrobras) could be delayed due to the country`s economic woes. The sale is planned for the second half of the year and is central to Brazil`s privatization programme.

Three of Eletrobras` generating assets are being prepared for sale, the terms of which are due to be published at the end of May 1999. These are: Furnas Centrais Eletricas (Furnas); Centrais Eletricas do Norte do Brasil (Eletronorte); and Companhia Hidro Eletrica do Sao Francisco (Chesf). The need for investment in the sector was recently highlighted when a major power blackout hit eight states in Brazil.

Government advisers have warned that the current privatization schedule is over-ambitious in the current economic climate.

However, under pressure from the IMF (International Monetary Fund), the government has promised to press on with its privatization programme to raise revenue.

The government is planning to split Furnas, Eletronorte and Chesf into seven new companies. The National Development Bank will be in charge of the privatizations.

• Companhia Energetica de Sao Paulo (Cesp) has issued Invitations to Bid in the sale of Companhia de Gas de Sao Paulo (Comgas).