The government of Luiz Inácio Lula da Silva (PT) is awaiting the judgment of the agreement between União and Axia (formerly Eletrobras) at the STF (Federal Supreme Court) to release financial aid to Eletronuclear, the public company responsible for the Angra 1 and 2 power plants and which could have a cash hole in the coming weeks.
According to government technicians, the validation of the agreement, whatever the scope of the ministers’ decision, should pave the way for the issuance of 2.4 billion reais in bonds by Eletronuclear, which will be able to use this money to repay a loan taken out in recent months and gain momentum.
The agreement provided for the purchase of bonds by Axia, but, with the recent sale of the stake in the public company, this bond will be transferred to Âmbar Energia, a branch of the J&F group, owned by brothers Joesley and Wesley Batista.
When contacted, representatives of the group affirmed that the commitment made will be kept, but that the issuance procedures depend on Eletronuclear. Contacted, J&F did not respond.
Making bond issuance viable is one of the government’s priorities in the latter part of the year, as Eletronuclear faces serious financial difficulties. As shown Leafthe public company warned the executive of the risk of lack of liquidity and requested, at the end of October, aid of 1.4 billion reais from the government to honor payments due by the end of 2025.
In a letter sent to ENBPar, a public company through which the Union controls the plants, the command of Eletronuclear warned of the risk of an “operational and financial collapse”.
This month, the company must repay a debt of 570 million reais with banks BTG Pactual and ABC Brasil, hired to enable improvements for the extension of Angra 1’s operating license for another 20 years. These actions should have been financed with the resources of the debentures, but the matter did not see the light of day.
Hence the urgency for the government to seal the agreement on the STF. The analysis of the subject in plenary began on Thursday (4), and the ministers were divided between approving the entire document or only the section relating to the voting power of the Union in the management and budgetary councils of Axia, without giving the approval of the Supreme Court for the financial part.
The STF agreement also provides for the termination of the investment agreement at Angra 3, signed as part of the privatization process of what was then Eletronuclear. In practice, the private partner would be exempt from bearing part of the construction costs if the government decided to continue construction.
The Court’s score is five votes for full approval, which includes financial clauses, and another four for validation limited to discussion of the state’s vote on Axia. Missing is the statement by Minister Luiz Fux, scheduled for next Thursday (11).
Those involved in the discussion claim that the conclusion of the trial is necessary for the issuance of debentures. The score could end in a draw and, according to the STF press service, we will have to wait for the result to know what the outcome will be.
Government interlocutors affirm that, even if the STF does not approve the section relating to debentures, it will be possible to unblock the operation. The interpretation in this case is that the ministers are not invalidating the agreement, but simply saying that it is not up to the STF to give approval – which leaves the door open for the out-of-court agreement already signed.
The technicians have even questioned internally the possibility of proceeding with the issuance of bonds based on this reading that the majority of the Supreme Court has already understood that the agreement is legitimate, but there is still no final decision in this regard. As the trial will resume on the 11th, the guideline is to leave everything ready so that when the result is announced the operation can be carried out.
The resources obtained through the issuance of bonds will be used to invest in Angra 1, which currently constitutes an important source of income for Eletronuclear. The bank loan having been taken out to facilitate the timing of these actions, it can be repaid with the resources of the operation.
Angra 1’s previous operating license expired in 2024 and the government’s goal is to continue operating the unit. To achieve this, the factory obtained a license for an additional 20 years (until 2044), conditional on investments to be implemented in stages. Otherwise, the authorization may be revoked.
A complicating factor in the debenture discussion is that the relief will be short-lived for Eletronuclear. Studies carried out by the government show that the company will have difficulty paying this debt.
The agreement provides that they are convertible into shares, meaning that in the future J&F could end up with a larger stake in the company, if the government does not carry out a similar injection of resources to avoid diluting the Union’s stake in Eletronuclear.
Eletronuclear was a subsidiary of Eletrobras, privatized under the government of Jair Bolsonaro (PL) and renamed Axia. The nuclear branch, however, remained under state control because the Constitution prohibits the exploitation of this energy source by companies under the control of private entities.
Due to the power plants under its umbrella, Eletronuclear has a series of financial obligations, such as the frequent need to purchase fuel and debts assumed for maintenance and investments.
The company has an accumulated debt with INB (Indústrias Nucleares do Brasil), but has agreed to transfer around 80 million reais per month to maintain the supply of inputs. Without the issuance of debentures, even this flow could be threatened, creating a risk of operational collapse.
In addition to the very short-term challenge, Eletronuclear’s main challenge lies in the work on Angra 3, which has been underway for 39 years and has been paralyzed since the Lava Jato operation. The government must choose between spending 24 billion reais to complete the work or up to 26 billion reais to bury the project once and for all.
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