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The Diplomat

Iberdrola, through its subsidiary Neoenergía, has been awarded the construction of two power lines in Brazil, projects that will involve an investment of 5.5 billion Brazilian reals (around 1 billion euros) and will create more than 11,000 jobs, the company said yesterday in a statement.

Specifically, Neoenergia has won two of the 13 lots offered in the auction of power transmission lines in the South American country and one of them, 1,707 kilometres long, is the longest in the competition.

This power line will run between the states of Minas Gerais and São Paulo and the award of its construction has become Iberdrola’s largest global contract for this type of infrastructure, according to the company.

The aim of this project is to expand the transmission capacity of the northern region of Minas Gerais to allow the flow of energy generated by renewable sources.

The project consists of three lines with voltage at 500 kilovolts (kV) and another at 440 kV, in addition to the new 500 kV New Bridge 3 substation.

The deadline granted by the Brazilian regulator for its construction is 60 months from the signing of the concession contract on 30 September 2022 and, according to the company, this project could create around 10,000 jobs.

Neoenergía has also been awarded a 291-kilometre power line that will run between nine municipalities in the state of Mato Grosso do Sul.

It consists of two 230 kV lines and a substation and the aim is to integrate the “small hydroelectric power plants” Fundãozinho, Areado and Bandeirante, as well as connecting the distribution in the Paraíso region.
“The deadline estimated by the regulator for completion is 48 months and it is expected to create around 1,250 jobs during construction,” Iberdrola said.

The company has opted for this auction because of its “attractive regulatory framework”, in which revenues are linked to inflation, and the “legal security of the country”.

“The acquisition of the assets reinforces Neoenergia’s expansion in the transmission segment and consolidates the company’s commitment to the development of the country’s electricity sector. We have a relevant role in the execution of the transmission project in the last five years that strengthens us in this market. The excellent alliances with construction companies and suppliers allow us to achieve very favourable conditions”, said the future CEO of Neoenergía as of 15 July, Eduardo Capelastegui.

Iberdrola currently has around 2,300 kilometres of transmission lines in operation in Brazil and has a further 4,000 kilometres under construction.