Interest rate, exchange rate & energy
A situation that is not at all beneficial for the Brazilian electricity sector is occurring.
Interest rates are among the highest in the world and the systemic devaluation of the Real (the local currency). A terrible combination from the perspective of investors in electricity generation, transmission and distribution value chain.
The reasons for this reality have to do with the lack of rigor with the country’s budget. Maneuvers by the legislative and executive branches supported by the judiciary always make possible “extra expenses” and, in the case of the electricity sector, the inclusion of “crony projects” that are not competitive.
The budget deficit is a reality. It is always based on a short-term vision that benefits everyone in power. Unfortunately.
It is very difficult to imagine a scenario in which the electricity sector will “deliver” competitive energy (compared to BRICS, for example). Thus, we will remain at the bottom of the market, with no realistic chance of prospering – especially competitive sectors such as industry, for example.
