The government has closed a R$7.8 billion operation to pay off debts owed by Eletrobras.

(Reuters) – The federal government closed a process with banks on Wednesday to provide 7.8 billion reais in receivables from Eltrobras (ELET3;ELET6) to reduce electricity bills, Mines and Energy Minister Alexandre Silveira said.

According to Silveira, the resources generated by the securitization of Eletrobras’ receivables will add up to another 4 billion reais, coming from funds, and will be used to immediately repay two loans that the electricity sector has taken out in the past, namely the Covid and water scarcity accounts, which affect energy consumers.

The financial operation was organised within the framework of a temporary measure issued by the government in April which expires this week.

In an order published the previous day, the government said the operation, organized by the Chamber of Commerce of Electric Energy (CCEE), offered “consumer benefits.” The proposal selected by the government, via a public call, was jointly submitted by Banco do Brasil, Itaú BBA, Bradesco BBI, BTG Pactual and Santander.

The Eletrobras consortium’s receivables refer to the privatization of the electricity company, carried out in 2022, when it was negotiated that the company would have to make contributions of more than 30 billion reais over the long term to the Energy Development Account (CDE). — the main burden on consumers’ electricity bills, which finances a series of public policies in the electricity sector.

According to Silveira, the government may continue to negotiate with Eletrobras to provide more resources to the CDE within the scope of the conciliation mediated by the Supreme Federal Court regarding the union’s voting power in the company.