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The last auction of energy transmission lines, end of June, was completed with a group of thirty Indians shouting "hexa", in tribute to the six lots sold, among the 20 sold at auction.
These lots, which will require investments of at least R $ 3.64 billion, were added to three other projects won in 2017 by the Indian company Sterlite Power.
In total, there will be at least 7 billion R $ investment According to Pratik Agarwal, world president of the company, it is only the beginning
. For him, Brazil will require investments in transmission lines for at least the next ten years.
This long-term perspective was one of the factors that aroused the interest of the Indians, who offered aggressive bids at the last auction, with discounts of up to 60%.
Plus the discount is high,
The company's plan is to invest 4 billion US dollars (the equivalent of about 15 billion reais) in Latin America for the next three or four years.
Brazil is the first country in which you invest outside of India. When did this interest start?
We have been studying the Brazilian market for at least five years and we have seen its ups and downs with the Europeans coming and going.
We decided at the end of 2016 that the market was ready and that we were ready to leave India.
Brazil has an interesting model of transmission line construction through concessions
I do not think any other country in the world has used private capital in this way. The country is ahead in this model.
And why Brazil?
In all the countries we badyze, we observe three main factors. First, if there is strong regulation.
Secondly, if there is volume available on the market. Brazil is a big country and will probably need new investments in transmission lines for at least the next ten years.
Third, the availability of a local ecosystem of partners and engineering companies. very rich in Brazil, has developed over a long period, and especially now, with a low demand in the infrastructure sector, many of these companies are looking for the energy sector.
Historically, Brazil has problems of judicialization and political influence in the electricity sector. This is a concern
I think that in general, India and Asian countries have a greater appetite for uncertainty than many Western countries.
Brazil has many conflicts and political uncertainties. But we do not believe that a government has renegotiated contracts already signed.
Regarding environmental uncertainties, it is part of the global market for broadcasting. These are risks that we manage.
The election may affect the expansion of the sector, but not the existing contracts.
The truth is that we do not believe [o resultado] will affect [o crescimento do setor] because the impact of hydrological changes in Brazil has led to a new composition of the energy matrix [com a entrada de mais usinas de energia renovável] and this change will require new investments in the transmission.
In recent years, many Chinese have entered the Brazilian energy sector and we have seen other Indian offer energy auctions. Will India be the next China in the country?
India has a more open economy since 1991, with many private companies in the infrastructure sector like us. China has many public companies in the energy sector. It's hard to say.
I do not believe that Indian companies will invest as much in Brazil as China, because in India, those who make these choices are not governments, but companies that evaluate investments not for geopolitical reasons.
However, there is a lot of interest. I believe that several Indian companies have attractive proposals in Brazil, in new sectors such as fintechs [startups financeiras] pharmaceutical companies and even more difficult sectors such as real estate and infrastructure.
These are countries with similar growth rates, similar geologies, and Indians have a greater openness to Brazilian uncertainty.
What are the next Sterlite projects in Brazil? Are there plans to work in other sectors?
Sterlite Power focuses on power transmission. For the moment, let's focus on this sector.
As long as Brazil has transmission problems, we will participate in the auction.
We do not have to enter a high percentage in an auction. We are not motivated by the volume of projects.
There are several reasons for these high rates compared to high discounts [do último leilão].
But if at future auctions, we feel that there is a lot of euphoria in the market and that people give it
What is the structure of Sterlite in the country right now?
Our philosophy is decentralized: we will be less aggressive in the auctions, we sit down, wait and finish just the projects we already have. We believe that Brazilians are best placed to manage projects in a country like Brazil.
We already have 44 employees and we will reach 80 by the end of this year. We have an office in São Paulo and we will soon announce a president at the local branch
Are there any plans to acquire in Brazil?
We do not seek, but we are open. There will be good opportunities.
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