EN 
PT_BR 
“I believe it is an important measure, fundamental for us to continue functioning well.” This is the analysis made by Bernardo Marangon, specialist in electricity markets and director of Exata Energia, when stating that Conta-Covid will be essential for the economic recovery of the electricity sector.
“One of the government’s most important initiatives was the creation of Covid Account. Distributors are suffering greatly from default and the significant drop in load due to social isolation, which has a negative impact on these companies' revenue. As they are responsible for a large part of the sector's revenue and taxes, they need to remain financially healthy, so that there is no ripple effect affecting other generation and transmission segments”, said Marangon.
Explaining in a simplified way, he commented that distributors will have access to a debt with a syndicate of banks and this debt will be paid through a new charge. “This structure is being called Conta-Covid, which will guarantee the survival of distributors and, consequently, the entire electricity sector chain. The consumer will have an additional charge on the energy tariff, as a result of this measure”.
However, according to Marangon, the Covid Account will have some consequences for the market, such as an increase in tariffs in 2021. “Unfortunately, there is nothing you can do. The government is spending a lot to help all sectors. So, at this point, this is what has to be done. Save as many companies as possible and maintain as many jobs as possible so that we don't have a bad recovery in the economy. For the distributed generation market, tariff increases tend to motivate new investments, with the aim of avoiding and reducing energy costs. Therefore, we believe that 2021 will be excellent for this sector”, he concluded.
According to the MME (Ministry of Mines and Energy), the Covid Account will inject liquidity into the electricity sector and mitigate the impact on electricity bills of the financial effects that the coronavirus pandemic has brought to companies.
Through a loan from several banks, coordinated by BNDES (National Bank for Economic and Social Development), part of the increases in energy tariffs, which would be incorporated into the electricity bill in 2020, will be diluted over five years.
Zero IOF rate for Covid-Account operation
President Jair Bolsonaro signed, on May 28, the decree that reduces the IOF (Financial Operations Tax) rate to zero when contracting credit from Conta-Covid. The exemption, provided for in Decree 10,377 and now authorized by the federal government, aims to further reduce the financial costs of the operation, as opposed to normal market costs. The total value of the transaction is expected to reach R$ 16 billion.
According to the government, the decree determines that the rate reduction only applies to triggering events occurring up to December 31, 2020. The loan contracted by CCEE (Electric Energy Commercialization Chamber) will be used to cover, in full or in part, of deficits and anticipation of revenue incurred by electric energy distribution concessionaires and licensees. This includes the portion of demand contracting not used by large energy consumers, which will have its payment postponed until July of this year.
