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Brazil Aims to Lower Electricity Bills With Eletrobras Funds

(Bloomberg) -- President Luiz Inacio Lula da Silva intends to issue a provisional measure next week designed to lower Brazil’s electricity prices through the securitization of payments owed by the country’s largest power generation company, according to an official familiar with the plan.

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The government expects the measure, which will need to be ratified by lawmakers after its publication, to reduce the price of energy in the regulated market by 3.5% this year, according to a draft of the proposal seen by Bloomberg.

The plan, part of Lula’s push to boost economic growth without creating inflation, relies on the securitization of payments that Centrais Eletricas Brasileiras SA, which was privatized in 2022, needs to make to the government.

The leftist president has been pilling pressure on cabinet members to come up with projects to shore up the economy and stem a decline in his popularity ahead of municipal elections in October.

The negotiation between Eletrobras and the government is still ongoing, according to another person with direct knowledge of the matter. The provisional measure is an independent initiative, not involved to the ongoing negotiation.

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