The company said in a statement that it has been ‘forced to reassess’ its development plan.
On 12 May, the Brazilian Parliament approved legislation to give local firms priority in bids for hydro concessions for capacities of 1MW-50MW, said Velcan. It added that although the law remains to be ratified by the President the company is undertaking a review of its plans.
At present, Velcan is building a hydro plant in Brazil with an installed capacity of 15MW. Upon releasing its annual results for 2008, also on 12 May, Velcan has confirmed its strategic plan to strengthen its project portfolio in Brazil.
The company recently agreed involvement in two other hydro projects in the state of Goias, Brazil. The plants would have capacities of 64MW and 25MW-30MW, respectively, and a development deal was struck last year with the state electricity company to have the plants operational by 2013.
In total, combined with other earlier concerns in the country, the company’s hydro portfolio would be up to approximately 180MW.
Just over six months ago Velcan said it would shift the focus of its portfolio development even more to small hydro from the activities that also included biomass projects, in Brazil and India.
