Fiat is to import several gas turbines from General Electric of the US to start business in the Brazilian thermal electric sector. The Ibiriteno facility will be constructed in association with Petrobras and will require a $600 million investment. It will have eventually have a capacity of 720 MW but operations will commence in 2002 generating 90 MW.

Eletrobras of Brazil plans to raise R$500 million ($195 million) in the international money market. The amount will be included in the supplementary budget of R$1.2 bn to be approved by the Brazilian ministry. The remainder R$700 million will come from its own cash. The strategy will allow Eletrobras to increase from R$3.1bn to R$4.3 bn its budget for 2001.

Tractebel and Codelco will launch a tender offer in the US to control the Chilean power company Edelnor. The operation, which will be carried out through Electroandina International, is aimed at buying back Edelnor’s debts, capitalizing them and purchasing Edelnor stocks held by Mirant Chile. Edelnor had taken foreign loans of $250 million and $90 million from UBS and Bank of America National Trust and Savings Association, respectively. If the tender offer is accepted, then Electroandina will acquire Edelnor and become the principal electric power generating company of the northern interconnected energy system SING. In the first five months of this year, Nopel, owned by Endesa and CMS Energy on a 50-50 basis, was SING’s main electric power generating company. However, together, Electroandina and Edelnor will generate 50% of SING’s production.

Annex 5 continues to cause controversy in Brazil. The dispute between Brazilian power generating and distribution companies over the application of Anexo 5, which prescribes repurchase by generators from distributors of excess power during the current rationing period, continues without a conclusion. Some legal analysts are saying that the regulation, as well as the current auctions of power, is unconstitutional. The Associacao Brasiliera das Geredoras de Energia Eletrica (Abrage) claims that the requirements of Anexo 5, if extended from June to December, would compromise 72% of the generators’ income, an amount equal to R$4.849 bn, while distributors would lose only R$2.8 bn. The government is taking a stand of non-interference, hoping that a consensual solution will be found. The federal power regulation agency, Agencia Nacional de Energia Eletrica (Aneel), is investigating irregularities detected in the management of the Mercado Atacadista de Energia (MAE), the mechanism for auction of surplus energy. If the allegations are proven, the organization could face fines up to R$1.1 million.

Aneel, the Brazilian power regulation body, will issue licences for a further five sections of transmission lines, totalling 753 km, in order to increase the capacity of the primary power grids of the south-central and northeast of the country. The auction will take place on September 28 in Rio. Investment is expected to be around R$337million for the lines, which will go into operation between June and December 2003.

consumed 5.81 per cent more electricity in the first half of 2001 compared to the first half of 2000. Accumulated generation totalled 42.35 GWh compared to 40.03 GWh a year earlier. Electrificacion del Caroni grew generation 1.85 per cent to total 30.72 GWh whilst Electricicdad de Caracas grew generation by 14.55 per cent to 4.88GWh, Enelven 17.18 per cent to 2.449 GWh and state group Cadafe 21.14 per cent to 4.247 GWh. In the first semester of 2001 there was the need to import 47 GWh, which had not been required the preceding year. Generation between July 2000 and June 2001 totalled 84.86 GWh.

Windpower electricity generation is to receive a boost from the Brazilian government on two fronts. The first is the publication of a wind atlas of Brazil, which shows the velocity of winds in the whole country. The second incentive is an anticipated legislative initiative which will require power distributors and utilities to buy, in the next 20 years, the equivalent of ten per cent of national consumption in the form of renewable energy. Wind power is currently the renewable source with the best cost/price ratio. Companies which are beginning to invest in this sector are SIIF, subsidiary of the French EdF, the Japanese Marubeni and Petrobras. Positive factors in the development of this industry are the velocity and constant direction of the winds in the north-east and the possibility of obtaining and trading the so-called ‘green certificates’ to more developed countries, as promoted in the Kyoto Accord.

Mexico’s government is still exaggerating the amount of investment needed to meet growing demands in the electricity sector, according to National University Economic Investigations Institute researcher Leticia Campos. Due to the slow economic growth the country is experiencing, 10 bn pesos per year would be sufficient to meet demand, rather than the 50 bn the government claims. Mexican business newspaper El Financiero reported Campos as saying the electricity sector generally increase around two per cent more than GDP, which would imply an increase in demand of only around three per cent this year.

Mexico’s President Vicente Fox is seeking to open the national electricity sector without any type of plan, taking as his model privatization and deregulation policies that have been proven failures all around the world, said opposition heavyweight Senator Manuel Bartlett Diaz. El Financiero business daily reported an ironic Bartlett saying it was not really possible to criticize the president’s legislative proposals for the electricity sector, as they “simply don’t exist”. However from his campaign pronouncements and what he has said on numerous visits to other countries, it is clear to Bartlett that Fox’s openness proposal is very similar to previous president Ernesto Zedillo’s, that is, based on the English model that is currently proving itself to be a grand failure.

Nuevo Leon state in Mexico will invest $24.5 million in an alternative energy generation projects, business newspaper El Financiero reported. The World Bank has selected the Nuevo Leon Solid Wastes Metropolitan System (Simeprodeso, Spanish acronym) for a $12 million investment in order to use trash to generate electricity. It is estimated the methane gas stored in the 42-hectare dump could provide 8 MW of electricity for the next twenty years.

The Brazilian Department of Energy will call for a feasibility study concerning the construction of thermal electric facility Angra 3. The request is likely to be made during the meeting of CNPE (Conselho Nacional de Politica Energetica) scheduled for the end of July 2001. Furnas has between R$1.5 bn and R$2 bn to be invested and Eletrobras has R$1.3 bn.