By Brazil Stock Guide – Neoenergia (NEOE3), controlled by Spain’s Iberdrola SA (BME: IBE), signed with Brazil’s Ministry of Mines and Energy a sixth amendment extending the concession of Neoenergia Pernambuco, formerly Celpe, for 30 years. The distributor serves 4 million consumer units — equivalent to 9.4 million residents. The contract, which was set to expire in 2030, will now run until 2060 at no additional cost, according to a market filing.
The concession covers 184 municipalities in Pernambuco, the Fernando de Noronha archipelago and the city of Pedras de Fogo in Paraíba, spanning 98,500 square kilometers (38,000 square miles). The company has net regulatory assets of R$ 8.4 billion ($1.6 billion), with service quality and financial indicators meeting the standards required by the government.
The renewal comes shortly after Iberdrola agreed to buy the 30.29% stake in Neoenergia previously held by pension fund Previ for R$ 11.95 billion (€1.88 billion / $2.07 billion). The deal lifts Iberdrola’s ownership in Brazil’s largest power distributor to 84%, reinforcing its strategy to expand regulated networks as demand and electrification accelerate.
At the signing ceremony, Energy Minister Alexandre Silveira represented the federal government. On behalf of the concessionaire, directors Fabiano da Rosa Carvalho and Luciana Maximino Maia signed the agreement, along with Iberdrola executives Eduardo Capelastegui Saiz and Solange Maria Pinto Ribeiro.
Leonardo Pimenta Gadelha, Neoenergia’s chief financial and investor relations officer, said the extension is aligned with the company’s strategy. “The renewal ensures quality service for our clients and profitability for shareholders.”
Political push for renewals
Silveira has openly pressed Brazil’s power regulator Aneel to accelerate the renewal of distribution concessions, arguing that the move could attract fresh investment into the sector. For Neoenergia, the 30-year extension reduces regulatory uncertainty and boosts cash-flow visibility, while underscoring Iberdrola’s commitment to Brazil, its second-largest market after Spain.