Engie dominated Brazil’s second electricity transmission auction in 2024, securing a major contract to build transmission lines and substations across five states. This victory represents a total investment of 2.9 billion reais ($533.8 million) and positions the French group as a central player in the modernization of the country’s electricity transmission network.
Strategic development and objectives of the dealership
The operation concerns the construction and maintenance of high-voltage transmission lines, as well as the installation of several strategic substations in the states of São Paulo, Paraná, Minas Gerais, Santa Catarina and Espírito Santo. With this acquisition, Engie plans to generate an annual income of 252.4 million reais, after proposing a reduction rate of 48.14% on the authorized income ceiling. This aggressive offer allowed Engie to outperform several competitors, including Eletrobras and Copel, as well as local and international consortiums such as Alupar and the Spanish firms Cymi and Acciona.
Engie: reinforced vertical integration
Already well established in the renewable energy production sector in Brazil, Engie is extending its activities to transmission to strengthen its presence across the entire energy value chain. This vertical integration strategy is part of a broader plan to develop Brazil’s energy infrastructure, as the government seeks to modernize and expand the national grid to meet growing electricity demand. This modernization is particularly crucial in the northern and northeastern regions, where connectivity remains insufficient despite the high potential for wind and solar energy production.
Auction results and other winners
Besides Engie, other companies won lots during this auction. Taesa won lot 3, which requires an investment of 244 million reais to build a substation in the state of São Paulo. Cox Brasil, for its part, obtained lot 4, relating to the creation of a substation in the state of Bahia, at a cost of 168.2 million reais. Although these projects are smaller in scale compared to that of Engie, they are also part of the national effort aimed at diversifying and strengthening the transmission network.
Outlook for the Brazilian energy sector
The Brazilian electric transmission market is particularly attractive to foreign investors due to its growth potential and the importance of public investment in infrastructure. Brazil’s National Electric Energy Agency (ANEEL) has intensified the holding of auctions to stimulate the development of transmission capacities, crucial to integrating the growing production of renewable energy. The government estimates that the need for new transmission infrastructure will reach several billion reais by 2025.
Engie, which already operates nearly 6,000 kilometers of transmission lines in Brazil and Chile, is using these projects to consolidate its presence in the region. Since 2017, the group has expanded its network with projects like Gralha Azul in the state of Paraná and Novo Estado in the states of Tocantins and Pará. The 2024 auction marks a new stage in this strategy, allowing Engie to establish itself as one of the main transmission operators in the country.
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