Iberdrola expands distribution footprint in Brazil

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Iberdrola group Brazil energy company Neoenergia has won the Brasilia electricity distributor CEB Distribuição in an international auction.

CEB Distribuição is the electricity distributor for the Federal District of Brazils’s capital, Brasilia, and supplies electricity to a population of 3 million. In 2019, the company had 1.1 million consumers and supplied a total of 6,577GWh.

Neoenergia, through its subsidiary Bahia Geração de Energia, was the winner of the auction for the privatisation of CEB Distribuição with an offer amounting to R$2.515 trillion ($491 million) for 100% of the company.

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The concession that CEB Distribuição owns runs until 2045, guaranteeing 25 years of regulated activity with stable and predictable incomes.

The acquisition of CEB Distribuição represents yet another step in Neoenergia’s expansion plan in the Brazilian energy sector and is in line with Iberdrola’s investment focus, centering on regulated businesses and renewable energy with big growth potential in countries that offer legal and regulatory stability, according to a statement.

The acquisition brings Neoenergia’s service area up to 840,800km2 and servicing 15.3 million customers – approximately 30% of the market.

Iberdrola’s presence in Brazil dates back over 20 years with the first investments in distribution in Coelba in Bahia state and Cosern in Rio Grande do Norte. Subsequent acquisitions have included Celpe in Pernambuco and Elektro in São Paulo and Mato Grosso do Sul.

In addition to distribution, Neoenergia also provides generation including over 3,500MW of renewables and transmission.

Neoenergia’s most recent acquisition in Brazil was for a pipeline of 400MW of wind generation from the renewable developer PEC Energia in Serra da Gameleira in Bahia state. The acquisition with a value of up to R$80 million ($15.7 million) includes the option for other wind projects of PEC Energia in the Serra da Gameleira region.