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Brazil to prefer domestic bidders for small hydro concessions

Brazil’s national congress has approved a bill granting preference to domestic companies in competition for concessions for small hydropower projects.

The bill, approved May 12, 2009, and sent to President Luiz Inacio Lula da Silva, would apply to concessions for hydropower projects of between 1 and 50 MW. It would give priority to national companies over those controlled directly or indirectly by foreign shareholders.

Velcan Energy said May 19 that the legislation likely would make it impossible for the France-based developer to win such hydroelectric concessions, since most competitions include domestic bidders. Velcan said it would review its objectives in Brazil and announce as soon as possible if it can pursue development there.

Last year, Velcan signed a partnership agreement with Brazil utility CELG Geracao e Transmissao S/A to develop two hydroelectric projects in Brazil. (HydroWorld 9/11/08) Velcan had said the partners plan to develop the 64-MW Pau d'Arco project on the Palma River in Tocantins State.

Additionally, the partners planned to develop 25 MW to 30 MW on the Claro River in the Araguaia River Basin of Goais State.

Velcan’s strategy is to develop hydro projects in stable emerging countries having a high potential of undeveloped hydropower. It has two sources of revenue, power sales and sale of carbon credits.

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