Eletrobras’s privatization: almost ready to launch

Brazilian electricity sector is on the verge of a significant change, as the government prepares to relinquish its control over Eletrobras, a key market player with presence in many Brazilian states and strategic public concessions within the energy generation and distribution markets. Eletrobras’s privatization has been in the works since early 2021 and the government wants to carry it out in the first half of 2022. The company hopes to attract billions of dollars in private investment by launching a capital increase and a follow-on public offering which would reduce the government´s stake to 45% or less.

However, Eletrobras’s proposed privatization has been called into question in both administrative and judicial courts. In this special edition of LS Brazil Outlook, our energy specialists discusses the likelihood that those proceedings may effectively block or reverse the transaction. As the Federal Audit Court (TCU) currently scrutinizes the follow-on offering, Luiz Felipe Calabró discusses the main points and most recent developments in TCU’s analysis. Rafael Zabaglia provides an overview of the claims filed before the Supreme Court against the law that authorized the follow-on offering and their potential impacts on the completion of the transaction.

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