Brazilian elections: Bolsonaro clashes with Lula da Silva over Eletrobras sale

RIO DE JANEIRO, BRAZIL – The firm decision of the Brazilian President, Jair Bolsonaro, to reduce the State’s participation in Eletrobras, the largest electric company in Latin America, generated a strong counterpoint with the sector led by Luiz Inácio Lula da Silva, a strong candidate to run for the presidency in October.

The sale of part of Eletrobras represents one of the priority objectives of Bolsonaro’s administration, which seeks to reduce the control of the State. The Brazilian State owns 60% of the company’s shares, and according to the Brazilian government, its divestment may reduce the value of tariffs.

After the backing of Congress, Bolsonaro paved the way for the sale of the company in July 2021. As announced, the government’s original idea was to complete the process in the first part of 2022. However, the measure has aroused strong opposition rejection.

Lula asked the private sector to abstain from the process, considering that the presidential elections will be held in October. From the Workers’ Party (PT), it was left to transpire that this sale could be put in doubt in case Bolsonaro is defeated.

“I hope that serious businessmen who want to invest in the Brazilian electricity sector do not jump on this strange mechanism that the sellouts of the current government are preparing for Eletrobras, a strategic company for Brazil, months before the election,” said Lula on Twitter.

The former president launched several criticisms of the process to sell the company, one of the mainstays of the management of the Minister of Economy, Paulo Guedes. Among other points, he criticized the approval of the first phase of the project by the Federal Court of Auditors (TCU).

Eletrobras owns the leading hydroelectric power generating companies and 40% of the transmission lines, hence its importance.

According to the PT, the Brazilian government is promoting the sale of the company for a sum equivalent to US$13 billion, when the TCU itself had calculated that the value should be double.

The president of the PT, Gleisi Hoffmann, affirmed that the sale of Eletrobras is a “crime against the homeland” and warned that she would go to Justice to object to the negotiation and the value set by Bolsonaro’s administration.

The Brazilian government has recently divested BR Distribuidora, owner of all Petrobras service stations, and is also trying to sell Correios, the largest postal company in Latin America, to some global logistics players.

Lula’s recent intervention in the debate on Electrobras came after it became known that the former president’s lead in voting intentions was reduced by five points, to 40% against Bolsonaro’s 31%, according to the latest DataPoder360 survey released.