Brazil’s Audit Court defers Eletrobras privatization review

RIO DE JANEIRO, BRAZIL – The analysis of the privatization of Eletrobras (ELET3;ELET6) – a company focused on power generation and transmission – by the Federal Audit Court (TCU) was deferred, in a defeat for the government.

A few hours before the start of the session on Wednesday, December 8, scheduled for 2:30 PM, the rapporteur of the case Aroldo Cedraz, had not submitted his opinion to the other members of the body and surprised other Justices by removing it from the agenda.

The judge had committed to present his vote on Tuesday afternoon, December 7, but failed to do so. The delay led some judges to consider a request for review, in order to have more time to study the matter.

During the session, TCU senior judge Walton Alencar Rodrigues called for the case to be heard. Cedraz, who had not yet announced the deferral, said that the case had been removed from the agenda because his office had received demonstrations from the government and from “society,” on Wednesday morning.

“God willing, the case will be back on the agenda next week,” Cedraz said.

The TCU’s decision is awaited by the government with uncertainty. Behind the scenes, the administration worked to expedite the vote, under the argument that the delay would be preventing the fulfillment of the privatization schedule. Originally expected for February 2022, the operation is now scheduled to occur between April and May.

This is the first privatization proposal to be passed in Congress during Bolsonaro’s administration. With the approval, the government proceeded with the preparations to issue new company shares, through which the federal government intends to reduce its stake in the company from approximately 60% to 45%.

The TCU’s technical area has pointed to inconsistencies in the operation data and presented a number of recommendations to the Ministry of Mines and Energy (MME), mainly related to the energy prices set by the portfolio – which may interfere with the amounts to be paid to the government and the projections to reduce tariffs in the coming years.

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