GSF Agreement

The GSF Agreement instruction was one of the main regulatory milestones of the year of 2020, sanctioned by Act 14,052/2020 and regulated by Normative Resolution 895/2020 of the National Electricity Agency (Aneel).

The Agreement provides for the possibility of generating companies to renegotiate non-recurring hydrological risk events, settling outstanding debts in the short-term market and obtaining, as a counterpart, an extension of the concession period for the assets.

CTG Brasil intends to adhere to the GSF Agreement and awaits the necessary procedures for the effective signature. Even so, the estimated effects of the agreement were provided in the accounting of the financial result of 2020. The company estimated, in this context, the formation of intangible assets amounting to R$ 910.8 million, with extensions of the concession that vary between 22 and 60 months, referring to Rio Paranapanema, Rio Sapucaí-Mirim, Rio Verde and Rio Canoas plants.

The effects for Rio Paraná were not considered in 2020, since at first the quota plants had not been considered by Aneel in the renegotiation. Although Aneel revised this position and considered the free portion of the quota plants in Resolution No. 895/2020, CTG Brasil did not have parameters to calculate the estimated reimbursement values for Rio Paraná.

The adherence closes the processes previously underway, notably the lawsuit by the Brazilian Association of Independent Electricity Producers (Apine), of which Rio Paranapanema and Rio Sapucaí-Mirim are parties, and the action brought directly by Rio Verde in face of Aneel related to the GSF.