Eletrobras, South America’s largest electric utility, has faced a rocky path since its 2022 privatization, struggling with inefficiency, legacy assets, and government influence despite new leadership. CEO Ivan Monteiro and his team have cut costs, sold non-core assets, and improved transparency, helping the stock rebound. However, challenges remain, including high interest rates, political interference, and a shifting energy market. The company’s experience highlights the complex realities of privatization in Latin America, offering key lessons for countries pursuing similar reforms. They write:
South America’s largest electric utility sprawls across Brazil, its web of wires and hydro dams capable of supplying enough energy for 75 million homes, from the savannah to the teeming coast. Like the country it helped create, Centrais Elétricas Brasileiras SA should be an economic powerhouse. […]
Since the Brazilian government gave up its majority stake in 2022, the company — better known as Eletrobras — has struggled to find its footing. Its new management, well-regarded veterans of oil and banking, have labored to streamline an organization whose mismatched assets accumulated over time included a hospital, a movie theater, a church and an airport. A Balkanized bureaucracy left over from merging several smaller companies into the modern Eletrobras added to the challenge. Its stock suffered accordingly. […]
But there are signs Eletrobras may finally have turned a corner. After the utility reported strong revenue growth on Aug. 6 — and a respectable dividend — investors sent the stock soaring. […]
Brazil’s electricity generation is expected to grow a median of 3.3% each year through 2034, according to Brazil’s Energy Research Office, a government agency known as EPE. Hydropower is expected decline to 47% of total generation from 56% in 2024, while wind, solar and natural gas expand. […]
Monteiro said the company’s improvements remain on track. “We are committed to executing what was discussed: a more mature company, well positioned, with the right models, cost reductions — everything we set out to do,” he said.
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