Eletrobras finances under TCU scrutiny

Brazil's federal audit court (TCU) has asked state-run power provider Eletrobras to provide documents to prove it did not set aside an extra R9bn ($1.75bn) as impairments, which could have been passed on to shareholders.

The possible impairments relate to a power loan used in the Itaipu hydroelectric plant project, including its transmission system, and Eletrobras charges to the regulatory agency Aneel for other generation activities.

This request comes a Eletrobras tries to move forward with its privatization, with asset values and terms of the deal under scrutiny by TCU. Its timing casts doubt about whether the sale of the company can be completed before the October presidential elections.

If the deal is not complete by June or July, opposition parties to President Jair Bolsonaro might use the stalled privatization as political ammunition.

By Rebecca Gompertz