Sale of Eletrobras is consolidated, says minister – 03/27/2023 – Market

The Minister of Mines and Energy, Alexandre Silveira, said during an event in São Paulo this Monday (27) that he considers the privatization of Eletrobras a fait accompli and that an eventual judicialization depends on the government.

He stated that he considers the privatization process to be unfair to Brazil, but that it is up to the government to charge for the company to function properly.

“As a minister, I need to work with the company in the legal situation it is in,” he said.

Last week, President Luiz Inácio Lula da Silva (PT) criticized the privatization of Eletrobras and said he hoped that one day the government would once again own the company. The petista also said that the transfer of control to the private initiative was a “crime against the homeland”.

“What was done at Eletrobras was a crime against the country. Privatizing a company of that size. What did you use the money for?”, questioned the president.

In February, the representative had already stated that the AGU (Attorney General of the Union) would question the privatization contract of Eletrobras.

On Monday, Silveira also reinforced the importance of the mining sector. He said that, despite the setbacks in recent years, the activity cannot be confused with illegal mining.

The minister also highlighted investments in the natural gas segment and ruled out abrupt changes in the electricity sector, such as those made in the past.

Better use of gas is one of the measures to ensure food security, he said. “It is not possible to be dependent on 85% of nitrogenous fertilizers, as it is not competitive in natural gas.”

“The profile of the government that won the election has a north, which is not divergent from private investments, but we have to give answers to the population. We know how we found the country and we have to give an answer to Brazilians. Nothing is resolved in these three sectors nothing in the pen, any change has to be structural”, he added.

The Minister of Mines and Energy also stated that the portfolio should send a bill called Fuel of the Future to the National Congress in the coming days. According to him, the goal is to integrate the entire decarbonization chain in the country.

The Fuel of the Future program was instituted in 2021 by the National Energy Policy Council (CNPE), which even created a technical committee to discuss the topic.

The minister did not mention which fuels could be included in the project. At the moment, the country is seeking to develop green hydrogen, which can be produced from wind energy installed on the high seas —which still depends on regulation.

Present at the same event, the Minister of Transport, Renan Filho, said this Monday (27th) that the new rules that will replace the spending cap need to guarantee investment with fiscal sustainability.

“The spending ceiling has turned into an investment ceiling. The country needed a stronger anchor, but over the last few years it has become the relevant country that invested the least in the world”, he criticized, during an event in São Paulo.

The minister stated that in 2014 Brazil reached the apex of investments, adding public and private. “From 2003 to 2014, Brazil increased investment. From 2015 until now, investment was erratic and never recovered.”

Renan Filho also stated that the ministry is working on the formulation of the “Plan 100”, to be presented during the 100 days in office, which will have different axes, such as revitalization of road and railway works, a grain harvest disposal plan, emergency care for regions affected by rain and attracting private investment.

The minister also said that there is BRL 16 billion in depreciation of infrastructure assets in 2022 alone, but that the government intends to compensate for the lack of investment in recent years.

“We are going to have BRL 22 billion in investments in transport this year, more than in the last four years and four times more than last year. It was not a lack of willingness to invest, but there was an imposition [do teto de gastos].”

According to him, the government also has the goal of reversing the trajectory of the worsening of the railway network and resuming unfinished works, mainly linked to the ministries of social areas (kindergartens, hospitals and schools).

“The new framework is the moment to guarantee new investments for the country. It is not a Sofia choice, in which you have to choose between investment without fiscal sustainability or sustainability without investment. People don’t act like that in their homes and companies don’t either no. The government can’t think like that either.”

With Reuters