In the recently concluded auction for transmission projects in Brazil, Sterlite Power emerged as the largest winner, clinching six lots at an investment of roughly $ 1 billion, securing about 65 per cent of the capex under auction. These critical projects will largely help move renewable power from northern and north eastern parts of Brazil with southern and south eastern regions where the load centers are located. By 2026, the total electricity consumption of the country is forecasted to increase to 741 TWh, indicating an average annual growth of 3.7 per cent per annum. To cater to this jump in demand, a 64.1 GW expansion in installed capacity of the National Interconnected System (SIN) is planned over the next 10-year period.
Pratik Agarwal, Group CEO, Sterlite Power, said, "Brazil requires an incremental 61,800 km in transmission lines, and an increase of 199,200 MVA capacity. This makes the market very attractive to us and we have already committed approximately $ 1.7 billion of the planned $ 4 billion in the region. We intend to develop global partnerships to execute our global portfolio of projects."
Brazilian power sector is characterised with policy and regulatory maturity. Given the strong contractual framework, including long concession tenures (30 years), inflation-protected revenues (which help lower the forex risk), and auction-based bidding for projects which happen on a pre-announced cadence, the Brazil market presents an ideal setup for any private transmission player.