State Grid Corporation of China Secures Largest Lot in Brazil’s Historic Electricity Transmission Line Auction

In a landmark development in Brazil’s energy sector, the Brazilian subsidiary of China’s State Grid Corporation emerged victorious in the country’s largest-ever electricity transmission line auction. The company committed to investing a substantial BRL 18.1 billion (USD 3.6 billion) to construct 1,513 kilometers of power lines across the states of Maranhão, Tocantins, and Goiás, including the development of substations. This investment represents a 40% discount on the maximum amount set by Brazil’s electricity regulator Aneel, a strategic move in the discount-based auction where the lowest annual revenue offer secures the win.

State Grid has been allocated a six-year period to complete the project, marking a significant investment that surpasses the total of 54 out of 55 auctions conducted by Aneel in the last 26 years. The primary goal of this project is to enhance the capacity for interconnecting the Northeast and Central-West regions of Brazil, particularly for the transportation of surplus renewable energy, including wind and solar power. This aligns with the tender’s requirements for high conversion capacity for lines and substations, an area where the Chinese company has demonstrated expertise.

This is not State Grid’s first foray into the Brazilian energy sector. Since selecting Brazil for its inaugural major investment outside of Asia in 2010, State Grid has been a key player in the country, having built or participated in the construction of over 16,000 kilometers of transmission lines across 13 states, representing an investment of BRL 28 billion. The company also played a role in the controversial Belo Monte hydroelectric plant project.

The Aneel auction anticipates a total investment of BRL 21.7 billion in transmission lines, including the lots won by State Grid. Other notable wins in the auction include the Olympus XVI consortium, comprising Alupar and Mercury Investments, and Celeo Redes Brasil, which outbid the recently privatized Eletrobras for significant projects in the states of Goiás, São Paulo, and Minas Gerais. These projects are critical for enhancing the regional interconnection and energy export capacity in Brazil’s North and Northeast regions.