Privatization of Eletrobras does not generate primary revenue for the Federal Government, says the Treasury.
With its accounts in the red, the federal government will privatize Eletrobras, but will not receive the primary revenue generated, said the executive secretary of the Ministry of Finance, Eduardo Guardia, on Tuesday. According to him, this would only happen if, in parallel with the privatization, the state-owned company decides to participate in the so-called de-regulation of power plants. Earlier, the Minister of Mines and Energy, Fernando Coelho Filho, announced that the government expects to obtain R$ 20 billion from the privatization.
By Leonardo Goy
BRASILIA (Reuters) The privatization of Eletrobras will not generate primary revenue for the government and, therefore, will not help reduce the expected fiscal deficits for this and the coming years.
According to the executive secretary of the Ministry of Finance, Eduardo Guardia, this would only occur if, in parallel with the privatization, the state-owned company decides to participate in the so-called de-regulation of sugar mills.
"Then, yes, it will be primary revenue," the secretary explained to journalists this Tuesday. "(The privatization) is not being done to generate primary revenue," he added.
Today, Eletrobras' power plants are part of the quota system created during the government of former President Dilma Rousseff, which provides for tariffs with prices below those practiced by the market.
In practice, Eletrobras could pay bonuses to the Federal Government and exit the quota system, with funds going directly into the government's coffers.
The government has been facing significant difficulties in balancing public finances after years of recession that impacted revenue collection and increased spending. For 2017 and 2018, it recently worsened its primary deficit targets to 159 billion reais for each year.
Today there are 91 listed power plants, of which Eletrobras owns 14, reported the president of the state-owned company, Wilson Ferreira Jr., who also participated in the press conference this Tuesday.
Guardia, from the Ministry of Finance, also said that it was not yet possible to discuss values related to the privatization of Eletrobras and that the sales model was still being developed.
Government expects to raise R$20 billion from the privatization of Eletrobras, says minister.
By Rodrigo Viga Gaier
The proposal by the Ministry of Mines and Energy to privatize Eletrobras, with the sale of control of the federal electricity company, could generate revenue of up to 20 billion reais for the Union, the Minister of Mines and Energy, Fernando Coelho Filho, told Reuters.
The ministry announced on Monday its intention to privatize the company and, according to Coelho Filho, the process will be conducted through the issuance of new shares, diluting the Union's stake.
"Eletrobras, as a holding company, with all its assets included, will be part of this package... The government doesn't sell shares; we propose issuing new shares, and by doing so, the current shares will be diluted, and the Union's (stake) will also be diluted," he explained.
The proposal is to put in place barriers to prevent this purchase from being concentrated in the hands of a single investor or group.
"We're going to create a series of rules for the democratization of this capital, possibly limiting it to a maximum stake per company. I think (even then) there will be no shortage of interested parties," said the minister.
"Something very similar to what was done with Vale and Embraer in the past," he concluded.