On February 25, ENGIE Brasil Energia (EGIE3) signed an exclusivity agreement for a period of 120 days  with FRAM Capital for the sale of the  Jorge Lacerda Thermoelectric Complex with an annual installed capacity of 857 MW located in Capivari de Baixo in the south of the state of Santa Catarina.

Since 2017, the Company has been examining alternatives for its coal generation assets in Brazil. During this period, proposals were analyzed but none of the ensuing negotiations were successful in reaching the point of equilibrium between risks and selling conditions. Consequently, the company decided to intensify its discussions with respect to the Complex in conjunction with multi-sectoral task forces and the participation of different spheres of government, class associations  and representatives of civil society. Currently, the details of the alternatives of sale versus a phased decommissioning of the asset are being considered.

“The eventual sale of  the Jorge Lacerda Thermoelectric Complex is in line with ENGIE’s decarbonization strategy throughout the world. The Company is intent on its proposal to accelerate the transition to a carbon neutral economy with its activities orientated towards renewable energy generation, natural gas, and infrastructure”, declared Eduardo Sattamini, the Company’s Chief Executive Officer.

“This is a lucrative operation with ample conditions for the potential acquiror to continue plant activities as long as risk allocations are correctly balanced” Sattamini explained. A conclusion to the negotiations currently underway are expected before the end of the first half of this year.

“We believe that the sale will give the coal chain sufficient time to transform, mitigating the impact on the economy in the south of the state with the end of operations in 2025”, he explained. Should a deal for selling the Complex not occur in the next few months, the phased decommissioning of the asset – planning for which is continuing – will be implemented.

In the event that negotiations are successful, the terms and conditions of the transaction will still be subject to the approval of the management and shareholders of ENGIE Brasil Energia as well as the appropriate government authorities.