International Experience with Private Sector Participation in Power Grids : Brazil Case Study
The power sector which consisted almost exclusively of enterprises under Federal and State control was severely affected by the repercussions of this negative phase for the Brazilian economy. The tariffs for sales between generators and distributor...
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| Language: | English en_US |
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World Bank, Washington, DC
2016
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| Online Access: | http://documents.worldbank.org/curated/en/2015/12/25666034/international-experience-private-sector-participation-power-grids-brazil-case-study http://hdl.handle.net/10986/23614 |
| Summary: | The power sector which consisted almost
exclusively of enterprises under Federal and State control
was severely affected by the repercussions of this negative
phase for the Brazilian economy. The tariffs for sales
between generators and distributors (wholesale trading) and
from the latter to end‐consumers (retail sales) were all
established by the Brazilian Government. Frequently used as
tools for curbing inflation, they fell well below the real
costs of the services rendered. As demonstrated below, these
tariff constraints had severe consequences for the power
generation, transmission and distribution segments in
Brazil. A clear awareness of these problems is apparent in
the preparation and promulgation of Brazil’s 1988
Constitution, which established that only the Federal
Government would be in charge of services and activities
linked to power services in Brazil, handled either directly,
or through concessions. Tenders will be required to select
the concessionaires, either public or private. This was the
situation of the Brazilian power sector during the 1990s,
fraught with difficulties and with its intra‐sector payment
flows severely undermined by the financial situation of the
concessionaires, almost all under State control. Quite
naturally, many new power generations, transmission and
distribution projects ground to a halt, or never even got
off the ground, with collateral effects on the construction
and equipment industries working with this sector. |
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