Privatization of Eletrobras must provide operational support for continuity of public policies
President Luiz Inácio Lula da Silva emphasized that even after privatization, Eletrobras should provide the necessary operational support to continue the public policies essential for Brazil. In a statement to the Supreme Court Federal, the Attorney General’s Office (AGO) said that the company should provide such support until the transition of the programs to ENBPar is completed. ENBPar is a public company linked to the mines and energy ministry that will be in charge of Eletrobras’ activities that are not subject to privatization. This document came within the context of the Direct Action of Unconstitutionality filed by the government.
The government had suggested that the Union should have a stake in the company’s command proportional to the percentage of shares it owns after privatization, which is approximately 43%. Among the critical programs, the document mentioned Luz para Todos and Mais Luz para a Amazônia, among others. These programs gave access to electricity to Brazilian population residing in rural areas and Amazonia states and are essential to the Union. The AGO believes that the privatization of Eletrobras should not mean a significant gap between the company’s management and policies meant to guarantee accessibility and regularity in energy supply to the Brazilian population. In continuation, the AGO mentioned that the government aims to provide electricity to over 104,000 families by 2023, and these programs have already provided assistance to around 3.6 million families – comprising 17.1 million people.
Government seeking to restore political rights in Eletrobras
The Union currently has only one member on the board of directors, although it represents the majority shareholder. The government and Supreme Court are working together to resolve this issue and restore political rights in Eletrobras. The AGO has reiterated that it is the Union’s responsibility to contribute to Eletrobras’s management according to its proportion of shares owned and protect the company’s public assets. However, the participation of the entity in the company’s management has been impractical due to the operational risk for the energy sector, as stated in the document.
Additional Piece
Privatization is a topic of debate worldwide. There are varied responses to the arguments for and against privatization. When looking at the Brazilian energy sector, the government’s decision to privatize Eletrobras is believed to have multiple benefits. Even so, the recent document received by the Supreme Court Federal emphasizes the government’s concerns regarding the continuity of public policies after privatization.
The Privatization of Eletrobras
Eletrobras is the biggest power company in the Americas, generating nearly a third of Brazil’s power and supplying electricity to 19 Brazilian states. In 2019, the government confirmed its plans to privatize the company, expecting to raise around $3.7 billion through the sale of shares. The government believes that the privatization of Eletrobras will induce greater competition and efficiency, provide the necessary funds to modernize the sector, and increase the share of renewable energy in the energy mix.
Benefits of the Privatization of Eletrobras
Eletrobras is over-leveraged and relies on government subsidies to function. By privatizing it, the government transfers the responsibility of modernizing the sector and ensuring the company’s efficient and profitable functioning to the private sector. Additionally, the new private owners will introduce new competencies, improve the energy services’ general quality, and introduce new technological solutions to increase the renewable energy share in the sector.
Concerns About the Privatization of Eletrobras
Despite the benefits of privatization, concerns remain over the energy sector. There are concerns that after privatization, services may become expensive and inaccessible, depriving the poorest of Brazil of the energy they need. The document submitted to the Supreme Court shows the government’s concerns regarding the continuity of programs such as Luz para Todos and Mais Luz para a Amazônia. These programs aim to provide access and use of electricity to populations residing in rural areas and the states of the Amazon, known for their underprivileged population. Privatization may cause these programs’ disconnect and lead to the lack of necessary initiatives for the population’s needs.
Conclusion
Privatization of Eletrobras provides opportunities for new competencies, greater proficiency and efficiency, modernization, and increased shares of renewable energy. Additionally, it may provide necessary funds for the sector’s modernization and free the government from financially supporting Eletrobras. However, it must be done with fairness and regard to the government’s and population’s needs. As suggested in the document sent to the Supreme Court, privatization must continue to cater to the public policies that help the underprivileged population of Brazil.
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President Luiz Inácio Lula da Silva argued that it was essential that Eletrobras, even privatized, provide operational support for the continuity of public policies relevant to Brazil, in a document sent yesterday by the Attorney General’s Office (AGU) to the Supreme Court Federal (STF).
Operational support would be needed until the transition of the programs to ENBPar, a public company linked to the mines and energy ministry, which will take over Eletrobras’ activities that are not subject to privatization, is not completed, the AGU said in a late statement. Monday. .
The document was presented within the framework of the Direct Action of Unconstitutionality (Adin) filed by the government, which seeks for the Union to have a stake in the command of the company proportional to the percentage of shares it owns after privatization, which is around 43 %.
Among the relevant programs, the government cited Luz para Todos and Mais Luz para a Amazônia, among others, considered by the Union as essential to provide access and use of electricity to the Brazilian population residing in rural areas and in the states of the Amazon. Legal.
“The privatization of Eletrobras cannot mean that the company’s management moves away from public policies that seek to guarantee accessibility and regularity in the supply of energy to the Brazilian population, especially those most in need,” said AGU.
In the statement, the AGU indicated that the aforementioned programs have already served 3.6 million families, comprising 17.1 million people, and that they still need to reach at least 400,000 families, and the government’s goal by 2023 is to enable access to electricity for more than 104,000 families.
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The government has been seeking, together with the Supreme Court, to restore political rights in Eletrobras. Currently, of the nine members of the company’s board of directors, the Union can appoint only one, as defined in the operation that pulverized control of the company during the previous government.
“The President of the Republic points out that it is the responsibility of the Union to take care of the public assets invested in the company, contributing to its management in proportion to the percentage of shares owned, avoiding operational risk for the energy sector or even loss of assets against the public capital invested. , which has not been possible, since the participation of the entity in the management of the company has been made unfeasible,” the AGU statement reiterated.
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Lula defende que Eletrobras dê apoio operacional a políticas públicas
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