By Marcela Ayres and Leticia Fucuchima
BRASILIA/SAO PAULO (Reuters) -Brazil’s Mines and Energy Ministry has asked the federal government for a capital injection into Eletronuclear to prevent the company’s imminent insolvency, adding to the long-running financial strain of the unfinished Angra 3 nuclear plant in Rio de Janeiro.
In a letter dated Monday and seen by Reuters, Minister Alexandre Silveira told the Finance, Planning and Management ministries that planned investments to maintain Angra 3 equipment and facilities were entirely cut from the 2026 budget.
Silveira warned that the situation “severely” compromises state-run nuclear power generator Eletronuclear’s ability to maintain Angra 3, service debt with banks BNDES and Caixa Economica Federal, and make payments to an electricity sector fund.
He said the company faced “imminent insolvency” without a capital contribution in next year’s budget cycle, without citing figures but referring to documents in which the firm pointed to a need for 1.4 billion reais ($262.70 million) in cash in order to avoid government dilution ahead of a planned debt issuance.
The ministries and Eletronuclear did not immediately respond to requests for comment.
Budget uncertainty has stalled a planned 2.4 billion-reais ($450.4 million) debt issuance to finance work that would add 20 years of operation to the 40-year-old Angra 1 plant – one of only two nuclear facilities in operation in Latin America’s largest economy, both run by Eletronuclear.
Under a government agreement, the securities would be issued by Eletronuclear and subscribed by Eletrobras, which could later convert them into shares without increasing its stake, requiring additional federal support.
Documents seen by Reuters also show that Eletronuclear called the issuance “indispensable,” citing short-term debt of 570 million reais with banks ABC and BTG due in December and cash expected to run out in November.
Failure to raise funds could trigger cross-defaults with BNDES, Caixa and Santander, requiring “extraordinary liquidity measures” as soon as October.
The lenders did not immediately respond to requests for comment.
ENBPar, which controls Eletronuclear, asked the Finance Ministry in August to call a shareholder meeting to advance the operation, but the process remains stalled.
Internal studies described in the documents indicate that the government needs to pour 1.4 billion reais into Eletronuclear to avoid losing control of the company under the proposed operation.
($1 = 5.3293 reais)
(Reporting by Marcela Ayres in Brasilia and Leticia Fucuchima in Sao Paulo; Editing by Matthew Lewis)
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