OREANDA-NEWS. September 28, 2017. Chinese and European energy firms picked up four hydroelectric concessions in one of Brazil's largest auctions for electricity assets.

The government raised a total of R12.1bn ($3.8bn), an average of nearly 10pc above the combined minimum prices for the four plants.

The winners will operate and maintain the four active plants for 30 years, with 70pc of the power supply earmarked for the regulated market and the balance for the non-regulated market.

For Romeu Rufino, head of Brazil's energy regulator Aneel, the auction results show that Brazil's electricity sector remains attractive thanks to a solid regulatory framework.

SPIC Pacific Energy, controlled by Pacific Hydro Brasil, a subsidiary of China's state-owned State Power Investment Company (SPIC), won the 1.7GW Sao Simao hydroelectric plant on the Parnaiba river, the largest of the four plants.

SPIC Pacific Energy offered R7.18bn for the plant, a 6.5pc premium on the minimum bid of R6.74bn stipulated by the government. It was the only bidder for the asset.

The award augments the Chinese presence in Brazil's energy sector. In a November 2015 hydroelectric concession auction, China Three Gorges (CTG) acquired the Jupia (1,551MW) and Ilha Solteira (3,444MW) plants.

The acquisition significantly increases Pacific Hydro Brasil's generation capacity in Brazil, which currently totals 58MW. Since April, SPIC has owned a 100pc stake in Pacific Hydro.

Engie Brasil Energia, the Brazilian subsidiary of French energy firm Engie, won the 424MW Jaguara plant on the Grande river and the 408MW Miranda plant on the Araguari river.

Engie offered R2.17bn for Jaguara, a 13.6pc premium on the minimum price of R1.91bn. Engie's bid of R1.36bn for Miranda was 22.4pc above the ceiling price of R1.29bn.

Engie outbid Italian energy company Enel for both assets.

But Enel picked up the 380MW Volta Grande plant, also located on the Grande river, for R1.42bn, 9.8pc above the minimum price of R1.29bn. Enel was the sole bidder.

The three winning companies highlighted their commitment to Brazil's power sector.