Insider

Accounts Court to analyze government’s “flawed” Eletrobras privatization plan

Accounts Court Eletrobras privatization plan
Hydroelectric dam in São José da Barra, in Minas Gerais. Photo: Deni Williams/Shutterstock

Brazil’s Federal Accounts Court has scheduled its preliminary analysis of the government’s plan to privatize energy giant Eletrobras for December 8. Court prosecutors issued a statement calling the proposal “incomplete” and “flawed,” adding that “the court’s precedent is clear with regard to refusing premature privatization studies.”

The prosecutors claim the plan fails to incorporate suggestions gathered in public hearings, which is a legal obligation. They also challenge the legality of a move to use BRL 5 billion (USD 887 million) to mitigate losses with energy price hikes caused by the migration of 22 hydroelectric contracts from a quota model to one based on market prices.

Furthermore, the law enabling the company’s privatization has yet to be completed. Congress will analyze 14 presidential vetoes on the proposal, issued in July. Lawmakers were set to vote on the matter on Tuesday, but the joint Congress sitting was canceled.