Mar 30, 2021

The Municipality of Petrolina and concession holder Engie Soluções Cidades Inteligentes e Infraestrutura de Petrolina S.A. signed, on Tuesday, the 30th, the public-private partnership (PPP) contract for the modernization, expansion and maintenance of the city’s public lighting infrastructure. The entire project was modeled by the Brazilian Development Bank (BNDES). The company, controlled by Engie Group’s Sadenco Sul-Americana de Engenharia e Comércio Ltda., was the winner of the concession auction held in November 2020.

The contract provides for the installation of LED lamps in more than 36,000 spots throughout the municipality, benefiting a population of about 350,000 inhabitants. The implementation of intelligent systems of operation and remote monitoring for lighting the most important streets of the city is also planned, as well as specific lighting for monuments and tourist spots, improving the safety and quality of life of the city’s citizens.

“This PPP modeled by BNDES establishes several indicators and operational goals that should be achieved by the concession holder and that will have an impact on their remuneration,” explains Cleverson Aroeira, superintendent of BNDES’s Investment Partnership Structuring Area. “This allows the amount effectively paid by the municipality to be in accordance with the actual performance presented by the company, which encourages it to invest in good equipment, trained teams and qualified processes so that the population of Petrolina can enjoy a quality public service.” According to Aroeira, the expectation is that more than R$ 90 million will be invested in the system over the 20 years of the concession period.

“This is the first PPP for lighting in the State of Pernambuco, which demonstrates the pioneering and innovation of the municipality to be able to guarantee a better quality service, regardless of whether it is a peripheral neighborhood, the central area or any socioeconomic issue,” said Mayor Miguel Coelho. “Our priority is to ensure quality public service, but also to make the city safer and more humane, further raising the quality of life for the population.”

Engie group presented a proposal in the amount of R$ 409,200.00 of public compensation to the municipality (amount that Petrolina will pay for the execution of the project), with a discount of 67.6% in relation to the maximum limit defined in the public notice. The maximum bid value at the auction was R$ 1.263 million. The winner and seven other bidders (interested investors) competed for the PPP by making offers below that amount. In this case, the winner was the lowest bidder, that is, the greatest haircut value, with a final value below half the in one.

BNDES and public lighting – The concession for the provision of public lighting services in Petrolina is part of BNDES’s support to municipalities program portfolio for the development of PPPs in this sector. Together, the projects modeled by BNDES total more than 500,000 public lighting points and will bring better quality public service to more than five million people. Direct positive impacts on the safety and quality of life of the population, enhanced tourism and greater dynamism of the economic activity of cities are expected. Moreover, the modernization using LED technology in the new lamps provides gains in energy efficiency and environmental sustainability.

Currently, BNDES’s public lighting program has eight projects, five of which have already gone to auction: Teresina, Porto Alegre, Vila Velha (ES) and Macapá, in addition to Petrolina. The projects of Curitiba and Caruaru (PE) have auctions scheduled for the second half of this year, and Jaboatão dos Guararapes (PE) is in the process of preparing technical studies.

About BNDES – Founded in 1952 and currently linked to the Ministry of Economy, BNDES is the main instrument of the Federal Government to promote long-term investments in the Brazilian economy. BNDES’s actions focus on the socioenvironmental and economic impact in Brazil. BNDES offers special conditions for micro-, small- and medium-sized enterprises, as well as social investment lines, directed at education and health, family agriculture, sanitation and urban transport.  In crisis situations, BNDES acts in an anticyclical manner and assists in formulating solutions for resuming economic growth.