By Brazil Stock Guide – Aggreko (AGK:LSE), the UK-based temporary power generator, secured BRL 440 million (US$82 million) in new contracts from Brazil’s Ministry of Mines and Energy (MME) to supply isolated systems in the Amazon. The approval, published under Resolution No. 30, strengthens Aggreko’s dominance in the region even as the company faces a regulatory dispute that could cost more than BRL 3 billion (US$556 million).
The ministry approved 14 projects worth a combined BRL 829 million (US$154 million), spread across four companies. Of the BRL 510 million (US$95 million) in federal funding, Aggreko captured 85%. Oliveira Energia secured BRL 37 million, state-run Eletrobras (ELET3:B3) BRL 18 million, and Roraima Energia BRL 11.7 million. The program is expected to benefit 652,000 residents in 36 Amazonian communities.
Aneel board member Fernando Mosna said contracts awarded in the 2016 Isolated Systems Auction may have wrongly included a 25% state VAT (ICMS) on electricity sales in Amazonas. According to the regulator, this inflated costs for the Fuel Consumption Account (CCC), a subsidy paid by all Brazilian consumers.
Aggreko’s new deals consolidate its grip on a market central to Brazil’s energy transition. Yet the pending Aneel decision could reshape older contracts and weigh on future revenues and cash flows.
Aggreko secures bulk of funds
The multinational captured the largest share of federal resources, reinforcing its dependence on public contracts in regions still reliant on diesel generation.
Mosna’s preliminary vote proposes refunding the disputed amounts retroactively from 2019, adjusted by Brazil’s consumer inflation index (IPCA) and repaid over 60 monthly installments. The calculation exceeds BRL 3 billion (US$556 million). The final decision will be taken by Aneel’s full board in the coming weeks.