Engie, Elecnor, Sterlite win licenses to build Brazil power lines

By José Roberto Gomes

SAO PAULO (Reuters) - French energy group Engie SA (ENGIE.PA), Spain's Elecnor (ENOR.MC), India's Sterlite Power Grid (SPGV.NS) and Brazilian company Neoenergia SA were among winners in a government auction of licenses to build power transmission lines in Brazil.

The four companies won rights on Friday to the largest projects on offer. The power lines they will build will draw combined investments of 7.17 billion reais ($2.16 billion), according to estimates by Brazil's electricity regulator Aneel.

Some 47 companies registered to present bids at the auction at Sao Paulo's stock exchange B3, which led to a very competitive round. Aneel registered a 40 percent fall on average for the values of tariffs the projects will be allowed to charge. In the auction, companies who offered the largest discounts in the tariffs would win.

The government awarded licenses for all the 11 power transmission projects on offer, the first time since 2014 that an auction of lines in Brazil awarded all the licenses available, said Aneel, which projects total investments of around 9 billion reais to build all the projects.

This is the first of four power sector auctions scheduled by the government to take place over coming days, as Brazil speeds up plans to attract local and foreign investments and try to boost a nascent economic recovery.

India's Sterlite won the license for the largest project on offer on Friday, a roughly 1,000-km (621-mile) line running through the northern states of Pará and Tocantins.

The licenses include a 30-year contract to operate the lines, with pre-defined annual revenues coming from the tariffs to be charged for the service.

This was the first time France's Engie SA secured a license to enter power transmission. The company is very active in Brazil, but usually on generation.

"This is a new line of business for us, complementary to our generation portfolio," Eduardo Sattamini, head of Engie's Brazil unit, said to reporters during the auction.

Despite the fact that mostly foreign companies secured the licenses for the largest projects, many local groups won the medium, small projects.

There was no Chinese firms among the winners, which was a surprise considering the last auctions in Brazil's power sector.

($1 = 3.3210 reais)

(Reporting by José Roberto Gomes; Writing by Ana Mano and Marcelo Teixeira; Editing by Marguerita Choy and Susan Thomas)