Brazil: Secret Meetings Preceded Government Aid for the Batista Brothers

(Background) Âmbar Energia, led by Joesley and Wesley Batista, held 17 undisclosed meetings with the Ministry of Mines and Energy from June 2023 to May 2024.

This preceded a provisional measure that shifted costs to Brazilian consumers and secured an highly profitable venture for the Batista brothers. The company and ministry both deny discussing the measure.

The Estadão outlet reported this following a Freedom of Information request by the Novo party.

In these meetings, Âmbar executives met key figures including Minister Alexandre Silveira and National Secretary of Electrical Energy Gentil Nogueira.

On May 29, a week before the provisional measure reached the Chief of Staff, Minister Silveira met with Âmbar President Marcelo Zanatta. None of these interactions appeared on the official agenda.

Congresswoman Adriana Ventura criticized the measure, highlighting its unfairness to consumers and questioning its transparency.

Signed by President Luiz Inácio Lula da Silva on June 13, the measure financially supported Amazonas Energia, transferring costs to consumers for up to 15 years.

This followed Âmbar’s acquisition of 12 thermoelectric plants from Eletrobras for R$4.7 billion (about $862 million).

Âmbar entered the meetings through private entrances and maintained secrecy, reports Estadão.

The measure, announced shortly after the sale, provided Âmbar a significant business advantage.

In response, the Securities and Exchange Commission (CVM) initiated an investigation.

Despite several meetings with key ministry officials, the ministry only officially recorded five meetings, focusing on unrelated energy issues.

In contrast, documents revealed multiple undisclosed meetings, including those before the measure’s publication.

The ministry claimed the provisional measure wasn’t discussed with Âmbar or any company, stating the need for a solution for Amazonas Energia was public knowledge.

Meanwhile, Âmbar claimed their purchase was part of a competitive process and denied discussing the measure.

Background

The Batista brothers’ company, Âmbar Energia, benefited greatly from government aid due to strategic business moves and a supportive provisional measure.

Here’s a breakdown:

1. Plant Acquisition

Âmbar Energia bought 12 thermoelectric plants from Eletrobras for R$4.7 billion ($862 million).

These plants were struggling financially due to Amazonas Energia’s R$9 billion ($1.65 billion) debt and monthly liabilities of R$150 million ($27.5 million).

2. Government Financial Aid

A provisional measure shortly after the acquisition transferred the R$150 million ($27.5 million) monthly costs from Âmbar to Brazilian consumers.

These costs would be covered through electricity bills for up to 15 years.

3. Risk Reduction and Profit Assurance

This measure removed Âmbar’s financial risks, providing a guaranteed revenue stream and significantly improving their financial stability and profitability.

4. Strategic Market Positioning

The measure allowed Âmbar to convert the R$9 billion ($1.65 billion) debt into equity in Eletrobras if they acquired Amazonas Energia.

This positioned Âmbar to dominate the northern Brazil energy market, enhancing their market power and financial gains.

These government-supported actions turned a risky investment into a secure and highly profitable venture for the Batista brothers, leveraging public funds to stabilize and grow their business.

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