(Image: iStock/Leila Melhado)
As electrical take the field next Friday (27) for another energy auction comprising 783 km of transmission lines and substations, with capex estimated at R$3.4 billion.
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These greenfield projects are located in five states: Santa Catarina, Paraná, Minas Gerais, São Paulo, Holy Spirit e Bahia.
In total, there will be only four lots, with a relatively small investment, which should make the event competitive, in the view of XP.
Despite this, bidders can submit a proposal for the entire block or subblocks.
A Genial goes along the same lines by stating that the auction is much smaller than the previous ones, both in terms of number of lots offered and in size — the only exception is lot 01 (1A/2B), with a significant investment of up to R$2.9 billion.
“We understand that the use of tax benefits and operational synergies with other assets can help improve efficiency and consequently the returns on the assets offered. According to our estimates, the IRRs (internal rate of return) offered are between 12.5-17% real leveraged”, he says.
Already the Bank of America believes that the competition will be softer. The bank recalls that in the last four auctions, competitors offered a 42% discount on maximum revenues.
“This compares to an average discount of 52% in 2018-22 auctions. The reduction was motivated by the scenario of higher interest rates in Brazil and lower performance above regulatory levels (capex and opex). We hope this trend continues in this auction.”
Which companies stand to win?
Genial says that trying to guess who will emerge from these highly competitive processes is a demoralizing process.
“That said, we believe we have the presence of all transmission companies under our coverage at the auction.”
BofA risks saying some names like Copel (CPLE3), Engie Brasil (EGIE3) e Taesa (TAEE11).
“In our view, the Copel It is a likely competitor to Block 1 (R$3 billion in capex) due to synergies with other assets in the state of Paraná”, he says.
I and Engie Brasil should continue with its current growth in the broadcast sector.
The bank also highlights that the Taesain turn, can resume its participation in transmission auctions (last block won in 2022) because, despite its high leverage (4 times Net Debt/EBITDA), the capex plan of current contracts ends in 2025-26.
Given the small size of Blocks 3 and 4, it is also possible to expect unlisted companies and construction companies to participate.
Neoenergia (NEOE3) e Paulista Broadcast (TRPL3) have already stated in recent conference calls that they will not bid in the auction.