The privatization of the Brazilian Eletrobras, the largest electricity company in Latin America, enters the final stretch

Entrance of the headquarters of the public company Eletrobras, in Rio de Janeiro, this Wednesday.André Coelho (EFE)

The shares of the Brazilian state company Eletrobras have risen more than 4% at the opening of the São Paulo Stock Exchange and more than 3% in New York this Thursday after the day before the Brazilian Court of Accounts gave the go-ahead to the privatization of the largest electricity company in Latin America.

Some procedures are still pending, but when they are completed it will be the first major privatization of the government of Jair Bolsonaro, who came to power with an ultra-liberal discourse on the economy that the pandemic and lack of parliamentary support have frustrated.

The government is in a hurry because Bolsonaro's intention is for the entry of private investors to materialize before the October elections.

Congress approved the de-stateization of the company last year.

The Court of Auditors finally analyzed the Eletrobras case this Wednesday after several postponements.

The judges approved the privatization process by seven votes to one, which paves the way for reducing the State's participation.

The plan is to do so by issuing new shares that will give entry to private investors and dilute state participation from the current 72% to 45%.

The Brazilian government hopes to capture some 67,000 million reais (13,500 million dollars or 13,000 million euros).

The state-owned Eletrobras, founded in 1962, has 14,000 employees and closed 2021 with a profit of 5.7 billion reais (1.16 billion dollars, 1.1 billion euros).

After the court ruling, the Minister of Mines and Energy, Adolfo Sachsida, expressed his joy in a tweet: “It is a historic day for Brazil.

The MME (the ministry) remains committed to complying diligently and on time with the next stages of the process.

With God's grace, we move on."

The Government intends to complete the privatization between mid-June and mid-August.

Five months before the elections, Eletrobras is one of the campaign themes.

The favorite to win the October elections, former president Luiz Inácio Lula da Silva, again criticized the operation while the court was in session and he was in chapel to marry (by the way, with a former high-ranking electric company official).

"Without a public Eletrobras, Brazil loses much of its sovereignty and energy security," tweeted the leftist who accused the government of "selling strategic companies" at "liquidation" prices.

Gasoline and electricity prices are extremely sensitive issues because inflation is rampant.

The 11.3% accumulated in the last year places Brazil as the third largest economy with the highest inflation behind Argentina and Turkey.

A shock, as well as a disaster, for the pocketbook of Brazilians because prices have been remarkably stable in Brazil since the Real Plan ended hyperinflation in the 1990s.

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