The Brazilian government and the Chinese-origin company State Grid Brazil signed on Wednesday in Brasília the largest energy transmission contract in the history of the Brazilian electricity sector, which had been auctioned by the National Electric Energy Agency (Aneel) last December.

The project represents 18.1 billion reais (US$3.46 billion) in investments, 83% of the total value contracted in the auction, and includes the construction of 1,513 km of direct current transmission lines and the maintenance of another 1,468 km in the states of Maranhão (northeast), Tocantins (north), and Goiás (midwest).

Due to its complexity, the project has a 72-month execution period, longer than the usual 60 months.

On the Brazilian side, the ceremony held on Wednesday at the Palácio do Planalto in Brasília was led by the Minister of Mines and Energy, Alexandre Silveira, while representing the Chinese company were Sun Tao, president of State Grid Brazil Holding (SGBH), and Jin Wei, vice president of State Grid Corporation of China (SGCC).

In addition to the contract with State Grid, contracts for two smaller lots, awarded in December to Brazilian companies, were also signed: Consortium Olympus 16, led by Alupar Investimentos and also integrated by Mercury Investimentos and Celeo Redes Brasil.

"Today's agenda is the result of the largest transmission auction in the history of our country, and these actions directly benefit households, businesses, and industries," said Silveira.

"Our focus is on the citizen who needs access to electricity at a fair price, without interruptions. That's why we have invested in so many initiatives focused on energy transition, and Brazil has been advancing more than ever in this regard," he added.

The interconnection works will transport the surplus energy produced by renewable sources in the Northeast to the rest of the country, which is experiencing a boom in new wind and solar energy projects.

The Ministry of Mines and Energy estimates that by 2027, the Northeast will contribute 13,328 MW to the installed capacity of the National Interconnected System (SIN), consolidating the region as a vector for security and energy transition.

"Brazil is more interconnected, stronger, more united, and greener. All of this means energy security for our population. It means combating inequality, taking care of the poorest, seeking social and economic development, generating quality jobs, and income for our people," emphasized the minister.

The agreed investments total 21.7 billion reais (US$4.34 billion), and the concessions have a duration of 30 years. The three contracts signed on Wednesday total 4,471 km of transmission lines, including construction, maintenance, and operation, of which 3,007 km will be new lines.

On Tuesday, the CEO of State Grid Brazil, Sun Peng, announced the intention to invest 200 billion reais (US$40 billion) in the Brazilian energy sector in the coming years.

The new investments will be made in the transmission, production, and distribution segments of the electricity sector, as well as in renewable sources and mineral ventures focused on strategic minerals for the transition.

Currently considered one of the largest energy companies in the South American country, State Grid Brazil Holding began its operations in 2010 with the acquisition of seven energy transmission companies in Brazil, and it currently operates 24 concessions.

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