By Michael Place?/?Business News Americas
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Brazilian President Dilma Rousseff has revealed the government is close to announcing sweeping reforms aimed at reducing the cost of electric power.
In comments published on Brazil's federal planning website, Rousseff said lower production costs would encourage investments in infrastructure and improve competitiveness.
"We have to reduce the cost of energy and make the taxation of the sector more rational," Rousseff said.
"It's not only a question of reducing costs, we have to encourage investments. We can't deter the participation of new capital goods."
Energy prices in Brazil are considered among the highest in the world due to state and federal taxes which comprise up to 45% of electricity bills.
Rousseff said a decision would also be made soon regarding the impending expiry of generation, distribution and transmission contracts totaling 22GW.
Unions have called for the concessions - 70% of which are controlled by state-run power company Eletrobras (NYSE: EBR) - to be renewed.
But S?o Paulo state industry federation Fiesp says new bid rounds will save Brazilian consumers US$500bn in the next 30 years.
Rousseff added the government would continue its policy of reducing interest rates and eliminating bureaucratic barriers for the energy sector.
"We are focused on clearing the logistical bottlenecks and diminishing the costs that hinder our development," she concluded.
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