Petrobras

Unions launch campaign opposing plan to privatize Eletrobras

The privatization of Eletrobras could create energy shortages and higher electricity bills for household consumers.

Brasil de Fato | Brasília (DF)

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Unions and social movements denounce the proposed privatization proposals. / Agência Brasil

Elected political officials along with members from Brazil’s organized labor movement launched a campaign on Friday, which opposes the proposed privatization initiative of the country’s largest electric utilities provider, Eletrobras. 

Brazilian labor leader Icaro Barreto warned that the Eletrobras privatization scheme, proposed by President Michel Temer, would compromise Brazilian sovereignty, increase the price of electricity bills on household consumers and may lead to medium and long term energy shortages. 

"In the short term, privatization will bring about higher tariffs, especially for small business owners and also for residential consumers. In the medium and long term, it will generate a serious shortage problem, similar to what we experienced during the historic shortages of 2001,” Icaro Barreto, director of Urbanized Unions of Brasilia stated. 

Meanwhile, Gilberto Cervinski, the coordinator of the Movement of Affected by Dams (MAB), also pointed out that under the proposed initiative, Electrobras would grant greater leverage to multi-national corporations in future negotiations with regards to the terms, conditions and distribution of the country’s energy grid. 

Under the proposal, Cervinski argues that taxpayers will be forced to pay a greater share over a longer period of time of the country’s electricity distribution grid. 

“Take for example, Belo Monte Hydroelectric Dam, which has an estimated value of $9.3 billion, is refinanced by taxpayers in their electricity bill over a 30-year period. However, under the proposed privatization plan, electricity contracts will be renegotiated forcing taxpayers into longer term payment plans,” Cervinski explains. 

Eletrobras is the biggest electricity utility company in Latin America and the tenth biggest in the world. Through its subsidiaries, it owns 40 percent of Brazil's generation capacity, most of it from hydroelectric power plants, and it controls 69 percent of the country's electricity distribution.

A national grid system was introduced in 1999 covering almost all of the country. Brazil's electricity is supplied at 110, 127 and 220 volts, 60 hertz and this distribution is partially allocated by private companies.

Edition: Nate Singham