Eletrobras returns to the TCU agenda, which should postpone government privatization plans

Named the biggest trial of the year in Federal Audit Court (TCU)the process of analyzing the second stage of the privatization of electrobras will be tried by the Court this week. The theme is at the heart of the electoral dispute of the two candidates who lead the race for the Palácio do Planalto, Jair Bolsonaro and Luiz Inacio Lula da Silva.

The trial is scheduled for next Wednesday, the 20th, but all the attention of investors interested in carrying out the privatization of the state-owned energy company is focused on the request for a view from TCU Minister Vital do Rego, which is taken for granted. He also postponed the conclusion of the first stage trial.

While the Bolsonaro government puts the chips on its allies in court to get the judgment in time to make the sale in May, the former president’s political allies are putting pressure to stop the privatization process still in 2022. the TCU regiment determines that requests for views cannot exceed 60 days and the definition of the deadline must be collective, in a vote of the ministers of the Court.

In order to still have time to complete the procedures for the company’s privatization operation, the deadline could not be longer than seven days, extending the final judgment to the 27th. Even so, time would be very tight for the auction on the 13th. May, a window considered ideal by investors before the elections.

Tightening deadlines

As a way of not harming the schedule, the ministers aligned with the government in the TCU will try to implement the same regimental thesis that they achieved during the 5G trial.

When the Court of Auditors began to judge the process to give approval to the auction involving the new radio frequency bands, Minister Arnoldo Cedraz, who today reports on the privatization of Eletrobras, initially asked for 60 days to analyze the case. With pressure from the federal government, which was already late to hold the 5G auction, Cedraz agreed to reduce the period to 30 days, but Minister Jorge Oliveira resorted to the TCU regiment, suggested reducing the period even further, from 30 to 7 days, being followed by all the other ministers who attended the session.

Behind the scenes of the court, however, members of the body point out that the case is totally different and that, in just seven days, it is not possible to analyze the details of the process. “There was no transfer of tangible public assets to the private sector,” pondered a source at the Court.

Thus, a group of ministers of the Court privately needed more time, between 20 and 30 days. After that deadline, the paperwork for the auction would have to be reviewed.

According to the Estadãothe TCU also received information from the National Bank for Economic Development (BNDES)last Friday afternoon, that American investors warned about time restrictions at the SEC, the US CVM, for the global offering. The company has Eletrobras shares traded on the American stock exchange and is facing lawsuits with the regulator for informational issues.

Eletrobras’ privatization operation is not in the classic model, in which the Union sells its entire shareholding, control of the asset or grants rights to the private sector. A capitalization will be carried out with the issuance of company shares until the Union’s participation in the company is diluted.

With the corporate restructuring, the Federal Government will continue to have control over Eletronuclear and Itaipu and with the continuity of sectorial programs, including Procel and Luz para Todos. The vote will be limited to 10% for any shareholder, which will make Eletrobras a company without a defined controller. BNDES calculates that the entire process will generate R$ 100 billion.


The privatization of Eletrobras entered the electoral debate because PT leaders signaled that, in a possible Lula government, the operation would be revoked and, therefore, it would be better for the TCU not to release the operation. The alert was given at a seminar organized by the TCU last week to discuss the sale. Lula has also warned businessmen in a tweet posted at the end of February.

“I hope that serious businessmen who want to invest in the Brazilian electricity sector do not embark on this weird arrangement that the current government’s homeland merchants are preparing for Eletrobras, a strategic company for Brazil, months before the election,” he wrote.

The topic was the subject of conversations at the ex-president’s dinner with MDB chiefs last week in Brasília.

Behind the scenes of the government, the Minister of Economy, Paulo Guedes, criticizes the PT’s pressure on the TCU and speaks of political interference in the Court of Auditors if the process is not judged in the time necessary to carry out the operation. In a ceremony at Palácio do Planalto to launch the Recicla+ program last week, Guedes raised his tone by saying that no candidate can call the ministers of the TCU to try to paralyze the capitalization of Eletrobras.