The Project Company has no access to revenue prior to completion of construction and availability of the asset, so no payment mechanism is set for the construction period.
The Project Company's winning bid for the project was significantly above the set minimum bid of about BRL 300,000. The investment fee payable to the Procuring Authority of approximately BRL 2 million is broken down into annual fees, adjusted for inflation, which are paid in monthly instalments. In addition to the investment fees paid to the Procuring Authority, the Project Company is required to pay usage fees to transmission line operators to connect to the grid. The PPP contract allowed for these fees to be reduced if the generation drops below 30GW, which has occurred a number of times on the project.
Although not specific to the PPP contract, it is important to highlight some additional fees/taxes that the Project Company is required to pay. All PPP contracts in Brazil are required to pay taxes that are dedicated to fund the Procuring Authority's operations in regulating and inspecting the market. In addition, there is a "wire-charge" mechanism, where all Project Companies are required to set up a fund where one percent of their annual revenue is deposited. This fund is then used to pay for investments in energy efficiency and Research and Development (R&D).
The management of the fund is the responsibility of the Project Company. However, proof of the deposits is required to be presented to the Procuring Authority, and all R&D or efficiency projects carried out by the fund are submitted to the Procuring Authority for review. If it is found that the projects do not meet the Procuring Authority's requirements of what counts as R&D, the Project Company will have to reinvest the money spent.