BRAZIL Law and Practice Contributed by: Débora Yanasse, Bruno Salzano, Luisa Tortolano Barreto and Julia Braga, Tauil & Chequer Advogados in association with Mayer Brown
drawing certain lawsuits regarding the GSF, the hydropower generators who chose to adhere to this new framework received an extension of their generation concessions and authorisations. Impact of COVID-19 In 2020, the COVID-19 pandemic utilities ’ finances decreased due to reduced energy con- sumption and increased payment defaults. As a result, Decree No 10,350/2020, regulated by ANEEL Normative Resolution No 885/2020, cre- ated the “ COVID Account”, a centralised credit line to support the liquidity of power distribution concessionaires, with costs passed on through tariffs. At the turn of 2021, Provisional Measure No 998, converted into Law No 14,120/2021, implement- ed measures to reduce tariff impacts from the pandemic and the privatisation of power utili- ties in the north and north-east regions. It also ended discounts on power transmission and dis- tribution tariffs for renewable energy projects for which authorisation was requested after March 2022. Privatisation of Eletrobras Provisional Measure No 1,031/2021, converted into Law 14,182/2021, determined the privatisa- tion of Eletrobras, Latin America’s largest power company, created in 1954 in the phase of strong public investment. The transaction was struc- tured and implemented by the Brazilian Develop- ment Bank ( Banco Nacional de Desenvolvimento Econômico e Social or BNDES) and concluded in June 2022, with a market capitalisation of BRL29.3 billion to BRL33.7 billion. This was the first privatisation in Brazil implemented through a public offering, and the largest by value. The developments from the enactment of the 1988 Constitution to the privatisation of Eletro-
bras have enabled the relevant increase in pri- vate investment in the electricity sector in Brazil, which represents the vast majority of the power generation, distribution and transmission assets, and few companies involved in power produc- tion remain state-owned today. Inclusion of Battery Energy Storage Systems in the Regulatory Framework The current Brazilian power regulatory frame- work does not regulate the implementation and operation of battery energy storage systems, nor pumped-storage hydroelectric power plants. ANEEL has started proceedings to fill this gap and promote the necessary regulatory improve- ments by launching Public Consultation No 039/2023 to collect contributions on the pos- sible impacts of such new regulation, which was concluded in early 2025. ANEEL intends to establish a procedure for obtaining authorisation for battery energy stor- age projects and pumped-storage hydroelectric power plants; to enable its connection to the national electricity grid; and to define the proper payment mechanism for such projects. ANEEL expects to publish such new regulations later in 2025. New Reform of Brazil’s Power Sector – Focus on Market Opening The intention of Provisional Measure No 1,300 published on 21 May 2025 (“MP 1,300”) is to promote reform of the Brazilian energy sector based on three pillars, as designated by the gov- ernment: • tariff justice; • freedom for the consumer; and • balance for the sector.
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