June 4, 2019 / 9:09 PM / 4 months ago

Brazil regulator blocks sale of wind complex by Renova to AES Tietê

SAO PAULO (Reuters) - Brazil’s power sector regulator ANEEL rejected on Tuesday the proposed transfer of wind power complex Alto Sertao III from Renova Energia SA to AES Tietê, a 1.34-billion real ($346.73 million) deal closed in April.

In a meeting of its board on Tuesday, ANEEL directors said the companies failed to show possible gains for the consumer or guarantees for the conclusion of the project.

Renova and AES Tietê were also seeking from ANEEL suspension of some fines related to delays in the complex’s completion.

In a securities filing, Renova Energia said the regulator’s decision only applies to windmills that already had future contracts to sell the energy. Windmills that did not have this contract could still be sold, Renova said.

AES Tietê, which is part of U.S. energy firm AES Corp, said that the 350 million reais phase A of the project, with an installed capacity of 438 MW, was not at risk from the regulator’s decision.

Similarly, both companies said that an option to buy up to 1.1 GW of wind projects under development by AES Tietê, for up to 76 million reais, was not affected by the ruling.

“In light of this decision, (AES Tietê) will reassess its interest in the acquisition of Phase B of this project. Phase A and the pipeline were not subject to Aneel’s decision and therefore follow their normal course within the schedule for the completion of the transaction,” AES Tietê said.

Units in Renova ended the day down 30.4%, at 21.50 reais, in late afternoon trading in Sao Paulo. Shares in AES Tietê were up 0.97% at 11.45 reais per share.

Reporting by Luciano Costa; Editing by James Dalgleish and Lisa Shumaker

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