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Bloomberg
The Brazilian unit of EDP — Energias de Portugal SA plans on boosting investments once Latin America’s largest economy starts to recover, aiming to double in size by 2020.
The firm, which began operating in Brazil during the privatisation wave of the 1990s, is “completely optimistic†with the outlook for the country, Chief Executive Officer Miguel Setas said in an interview at Bloomberg’s Sao Paulo office. With single-digit interest rates and subdued inflation, what’s missing is growth and a materialisation of the government’s agenda of reforms, he said.
Energias do Brasil, as the company is known, plans to focus investments in distribution and transmission lines, a segment which it recently entered and that has planned capital expenditures of 3 billion reais ($801 million) for the next four years. Transmission should account for 20 percent of the balance sheet by 2021, up from zero currently, with five transmission lots to be built, he said. The firm didn’t win contracts at the last few transmission line auctions, which had what Setas called predatory competition, but expects a secondary market to develop in case companies that won previous lots in auctions lose interest in the asset or don’t have the financial conditions to move forward with the projects.