Government of SP approves modeling of the privatization of Emae – 03/15/2024 – Market

The Tarcísio de Freitas (Republicans) government approved this Friday night (15) the modeling of the privatization of Emae (Metropolitan Water and Energy Company). The privatization notice will be published on Monday (18), and the government intends to hold the auction in April.

With a market value of R$2.3 billion, according to the São Paulo government, Emae manages the water reservoirs of Greater São Paulo, operates the canalized section of the Pinheiros River in the capital and operates in the hydroelectric energy generation sector.

Remaining from the privatization of Eletropaulo, Emae manages plants in the state that have an installed capacity of 960.8 MW — most of this capacity comes from the Henry Borden complex, in Cubatão, with an installed capacity of 889 MW.

In addition, it operates the Billings, Guarapiranga, Rio das Pedras and Pirapora reservoirs, as well as dams and dikes in these systems.

According to the Secretariat of Investment Partnerships, Emae, which is a publicly-held corporation controlled by the government, has net revenue of R$532 million and net worth of R$1.16 billion.

At an event this week, the governor of São Paulo stated that this would be “a very popular privatization, very successful, very competitive”.

One of the companies interested in the auction would be Eletrobras, which already holds almost 40% of the company’s non-preferred shares, in addition to Chinese companies, according to a lawyer who follows the sector.

The company’s privatization was suspended last year by the State Court of Auditors due to lack of bidding for contracting technical studies, but the process was released in April.

Tarcísio defended the sale of Emae even before taking office. The sale is considered a good thermometer for the privatization of Sabesp (SP’s sanitation company), considered the crown jewel of the governor’s privatization agenda, which could occur later this year.

“Let’s start with Emae, because it is a company that it no longer makes sense for the Government of São Paulo to have”, he said in December 2022. “Let’s think simple, slice the gorilla as some people say. Is it easy to sell Emae? Okay So sell Emae first, in the meantime we will work on what will be the great privatization of the state of São Paulo, which is Sabesp”, he said.