The plan to privatize Eletrobras this year risks being frustrated if the government goes ahead with the idea of changing the rules of the sale process to use R$32 billion of the money to reduce electricity bills in 2022.
Bolsonaro’s idea of changing the course of privatization comes to try to contain inflation, which is still on the rise and has affected the president’s popularity.
The capitalization, scheduled for this year, is under the evaluation of the TCU (Union Court of Auditors), which should give its opinion on the 18th. of control.
The assessment of the technical area of the court of accounts is that if there are changes in even a comma, the chance to complete the plan in 2022 will be buried.
as showed the Sheetthe government is now considering giving up receiving R$ 25 billion in cash in the payment to be made by Eletrobras to the National Treasury in grants for privatization, as established in the proposal submitted to Congress under analysis by the TCU.
Now, this amount would be paid over five years, while the R$ 32 billion owed to the CDE (Energy Development Account), a kind of fund that cushions tariff impacts on electricity bills, would be deposited in cash.
This also represents a change from the proposal sent to Congress, which foresees that this amount would be spread over five years, with a forecast of R$ 5 billion paid in advance this year. In its analysis, the TCU has already stated that it would not accept any amount above this ceiling if this payment is made in advance.
After the news, TCU ministers consulted the technical area involved in the evaluation of the privatization model.
The experts were unanimous in stating that the change intended by Palácio do Planalto will require the editing of new legal guidelines and a new submission of the proposal to the TCU. In other words, it would hardly be approved this year, and privatization would be a legacy for the next government.
For the technicians of the court, there is no legal impediment if the government wants to direct the entire amount of the grant, which is already expected to go to the Treasury, to the CDE. This would be a contribution from the Treasury to the account that finances the subsidies for the electricity bill, with no direct relationship to privatization.
However, this expense would need to be in the Budget and would be subject to the spending ceiling — a fiscal rule that limits the advance of expenses to the variation of inflation.
Today there is no fiscal surplus within the ceiling, which would require cuts in other areas to make way for the CDE. The technicians see no justification for opening extraordinary credit, an instrument intended for urgent and unpredictable situations, given that energy tariff readjustments were predictable.
Another point that has been highlighted in the TCU is that the resolution of the CNPE (National Energy Policy Council) determines the correction of the CDE values by the IPCA (National Extended Consumer Price Index) during the five-year period provided for the payment.
It would be necessary, therefore, to calculate this impact to update the cash value, in case the new proposal is formalized.
This would also entail a correction on the installments to be paid by the energy generation concessionaires in the São Francisco basin, which will have to allocate R$ 350 million annually for a period of ten years adjusted for inflation.
The Ministry of Mines and Energy was taken by surprise by the news and released a note this Tuesday (10) denying any change in the proposal submitted to Congress and the TCU. “In this regard, what is known is the claim presented by generation agents who seek to […] foresee the possibility of extending generation contracts”, says the note.
The ministry also states that “it did not deal with the rapporteur of any amendment to PL 414/21, which changes the law that deals with the guidelines of the Eletrobras capitalization process”.
At the Ministry of Economy, the incumbent Paulo Guedes advanced in conversations with the National Treasury to find out about the possibility of making this exchange.
According to the minister’s interlocutors, the initial idea was to maintain the original plan – R$ 25 billion paid in cash for the grants and R$ 32 billion in installments over five years to the CDE.
But, to meet the election of Jair Bolsonaro, who intends to use the R$ 32 billion from the CDE to reduce Brazilians’ energy bills, Guedes gave the go-ahead for the new plan, as long as the Treasury agrees.
The agency is now studying whether it is feasible to wait a little longer to receive the amounts without compromising the fiscal balance.
Pressure grew after a proposal for a legislative decree in the Chamber tried to prevent the readjustment of Ceará’s electricity bill. The president of the Chamber, Arthur Lira (PP), stated that the discussion should include other states with readjustments above 15%.
At TCU, Eletrobras’ capitalization divides the plenary. Part of the ministers vote with Jorge Oliveira, Bolsonaro’s nominee who has been trying to gather votes for privatization.
Ministers Walton Alencar and Benjamin Zymler end up leaning towards this group, according to those involved in the discussions.
Another part considers that there is negligence in the analysis around possible loss of value by society. In this group, according to reports, are Vital do Rêgo (who asked for views on the process) and, in some aspects of the proposal, Aroldo Cedraz (rapporteur).
Idiana Tomazelli and Alexa Salomão collaborated