Brazilian utility Cemig (BVMF:CMIG4) has agreed to make an advance payment of BRL 118 million (USD 36.31m/EUR 32.38m) to its renewables arm Renova Energia SA (BVMF:RNEW11) under an off-take contract the two signed in 2013.
Renova will use the bigger portion of the funds to support work on its 400-MW Alto Sertao III wind complex in Bahia, with the remainder being allocated for other needs. The money will be returned to the Brazilian utility through power deliveries in 2021, the renewables firm said on Tuesday.
Including this latest payment, Cemig has prepaid a total of BRL 272 million to Renova under the deal. Cemig also has the option to convert this amount into an equity interest of up to 49.9% in Alto Sertao Participacoes, the company controlling the Alto Sertao III - Phase A wind project. Under the terms of another newly-signed contract, Cemig can get full control over Bahia Holding SA and 49% of the shares of Ventos de Sao Cristovao Energias Renovaveis SA, the owners of other Renova wind projects.
Renova's board of directors authorised the move on Thursday. It is still subject to certain other approvals.