Cemig confirms it will pay R$ 11 billion for the four power plants.

Mines 247 - The government of Minas Gerais and Cemig are racing against time to secure R$ 11 billion after the federal government accepted an agreement that could prevent the auction of four of the state-owned company's power plants on September 27: Jaguara, Miranda, São Simão, and Volta Grande. Together, they account for about 50% of the company's generation. The company's president, Bernardo Salomão Alvarenga, announced on Friday (18) that the federal executive accepted the agreement, but this does not mean that the auction has been canceled. The Union already counts on the R$ 11 billion, the value of the auction's concession fee, which must be paid in November, to help cover the fiscal deficit of 2017.

The measure is a condition demanded by the executive branch to renegotiate debts with the state. The company argues that it has the right to maintain the hydroelectric plants because the concession contract signed by the federal government in 1997 provides for the automatic renewal of the plants for 20 years.

“The agreement was accepted on the condition that Cemig manages to raise the R$ 11 billion. Now, we need the (state) government to help us secure a loan from the banks. We are in contact with several institutions, such as Banco do Brasil and BNDES,” stated Alvarenga. The report was published in the newspaper O Tempo. Pimentel said in his speech that the government is “willing to reach a negotiated solution.”

The president of Cemig does not rule out the possibility of seeking a partner to raise the billion-dollar sum. "Nothing is ruled out, but now we need to study how to arrive at the amount," the executive stated.

Currently, the company's debt stands at R$ 12,5 billion, and according to the state-owned company, half of that amount is due in 2018. The company has approximately R$ 2,5 billion in cash.