Brazil | Eletrobras sale would be delayed until after elections | ECONOMY

The sale of Eletrobras, Brazil’s power company, is unlikely in 2022, while concerns about a revenue shortfall and elections would derail the government’s schedule, said a person familiar with the talks.

The Federal Court of Accounts, the person in charge of giving the green light to the operation, considers that the Government has underestimated by at least 10 billion reais (US $ 1.8 billion) the income it expects to obtain from the privatized company once it renews the licenses for the operation of its hydroelectric power plants and transmission lines, said the person, who asked not to be identified as a private matter.

The court is also concerned that an election year, especially amid market turmoil due to concerns about the country’s fiscal outlook, may not be the best time to sell a company as large as Eletrobrasthe person said, adding that President Jair Bolsonaro has been warned that the sale probably won’t go ahead for now.

The Federal Court of Accounts and the Ministry of Economy They did not respond to a request for comment. Eletrobras declined to comment.

Not selling the company would not only be another setback for Economy Minister Paulo Guedes’ pro-market agenda, but it could also thwart the government’s plans to lower electricity prices next year using part of the proceeds from privatization. Eletrobras had announced on Friday the shortlisted banks to coordinate its offering of shares.

The Ministry of Economy expects to raise 60 billion reais through the sale of ordinary shares of the public service company, formally known as Brazilian Electric Power Stations SA, with 25,000 million reais destined directly to the Treasury.

The operation would dilute the government’s stake in the company to approximately 45%, although a gold share would still give it veto power over some decisions.

The government has been working to sell Eletrobras before March in what would be the only sale of a major state company by Guedes. The minister’s audacious privatization program lost steam as Bolsonaro never fully supported it.

Previously, the former president Michel Temer, launched a series of plans to sell Eletrobras in 2018, which were approved by Congress until this year.

On the way, the secretary of privatizations Salim Mattar and the CEO of Eletrobras Wilson Ferreira they quit because the operation was taking too long.

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