VZCZCXRO0334
RR RUEHRG
DE RUEHSO #0706/01 3421123
ZNR UUUUU ZZH
R 081121Z DEC 09
FM AMCONSUL SAO PAULO
TO RUEHC/SECSTATE WASHDC 0238
INFO RHEBAAA/DEPT OF ENERGY WASHINGTON DC
RHEHNSC/WHITE HOUSE NATIONAL SECURITY COUNCIL WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEHAC/AMEMBASSY ASUNCION
RUEHBO/AMEMBASSY BOGOTA
RUEHBR/AMEMBASSY BRASILIA
RUEHBU/AMEMBASSY BUENOS AIRES
RUEHCV/AMEMBASSY CARACAS
RUEHLP/AMEMBASSY LA PAZ
RUEHMN/AMEMBASSY MONTEVIDEO
RUEHPE/AMEMBASSY LIMA
RUEHRG/AMCONSUL RECIFE 0050
RUEHRI/AMCONSUL RIO DE JANEIRO
RUEHSG/AMEMBASSY SANTIAGO
RUEHSO/AMCONSUL SAO PAULO

UNCLAS SECTION 01 OF 02 SAO PAULO 000706 
 
SENSITIVE 
SIPDIS 
STATE EEB/TPP/BTA  PASS TO  FTC 
 
E.O. 12958: N/A 
TAGS: ECON EFIN ETRD BR PGOV ENRG
SUBJECT: SAO PAULO KEY ECONOMIC DEVELOPMENTS, NOVEMBER 16-30, 2009 
 
REF: BRASILIA 1383 
 
¶1. (U) SUMMARY: This cable covers the period of November 16-30, 
¶2009.  It highlights economic, energy and science and technology 
developments in the Sao Paulo Consular District not covered by 
broader reporting. Some significant developments during the period 
were: the upcoming first wind power auction, the development of 
smart grid standards, and Sao Paulo's share of the national GDP. 
END SUMMARY. 
 
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Brazil's First Wind Power Auction Signals Energy Diversification 
 
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¶2. (U) Brazil is likely to hold its first wind power auction on 
December 14 that should result in the construction of two gigawatts 
of new electricity production and investment of US$6 billion.  The 
auction is attracting several international players - Energias de 
Portugal, Electricit???? de France, Spain's Iderbrola, and the US 
EnerFin - plus several Brazilian firms.  The president of Abeeolica 
(the Brazilian Wind Power Association), Pedro Perrelli, lauded a 
record 441 proposals representing 13.3 gigawatts of potential power 
generation.  Brazil's potential for wind energy is 143 gigawatts, 
concentrated around its blustery 4,600-mile coastline where most 
projects would be based.  The government's goal is to build 10 
gigawatts of wind power capacity by 2020 to diversify away from its 
80 percent reliance on hydroelectricity.  New hydro installations 
are increasingly held up over environmental concerns.  The winners 
of this auction will get a 20-year power purchase agreement from 
the State. 
 
 
 
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Brazil Likely to Develop Smart Grid Standards by 2010 
 
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¶3. (SBU) The National Coordinator for Smart Grid Interoperability 
(NIST), Dr. George Arnold, visited Sao Paulo November 9-11 to 
provide a key note address at the most important Smart Grid Forum 
in Latin America and to meet with Brazilian regulators and the U.S. 
private sector.  According to data from the National Agency for 
Electric Energy, Brazil loses approximately US$4 Billion from 
transmission inefficiencies and theft each year. These losses could 
be reduced with smart grid technologies.  Their meetings identified 
areas of bilateral cooperation, including assisting Brazil in 
developing smart grid standards by July 2010.  Adding more urgency 
to the situation, Brazilian experienced its first major blackout 
since 2003 affecting almost half of the country the last night of 
the conference. (Reftel A) 
 
 
 
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Possible Regulatory Changes in the Medical Devices Sector 
 
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¶4. (SBU) In response to Brazil's decision to begin new inspections 
in May 2010 of companies selling certain "high risk" in vitro 
diagnostic products and medical devices, Commercial Services Sao 
Paulo organized a technical seminar on November 4 with the 
inspecting agency (ANVISA) and 100 U.S. and Brazilian industry 
representatives to discuss regulatory changes in the medical 
devices sector. U.S. companies are concerned that ANVISA does not 
 
SAO PAULO 00000706  002 OF 002 
 
 
have enough resources to conduct the good manufacturing practices 
(GMP) inspections by the deadline, which could then jeopardize 
entry of over US$800 million worth of U.S. exports.  As a result of 
the seminar, ANVISA agreed to publish a technical note answering 
over 70 of industry's questions.  ANVISA also agreed to improve its 
website with instructions on how to request an inspection 
appointment. 
 
 
 
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Sao Paulo increases its share of the country's GDP 
 
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¶5. (SBU) According to data from Brazil's Institute of Statistics 
and Geography (IBGE), the State of Sao Paulo has gradually 
increased its role in the country's economy in the last five years, 
despite national efforts of economic de-centralization.  Sao 
Paulo's economy now accounts for 34 percent of the national GDP, up 
from 33 percent in 2004.  This increase is mainly due to average 
industrial growth around 7.4 percent well above the country's 
average of 6.1 percent.  Sao Paulo's industrial growth, which 
accounts for 44 percent of Brazil's industrial GDP, has occurred 
amid a decline in the fiscal advantages provided by other states to 
encourage private companies to set up industrial parks.  As a 
result, Sao Paulo remains the largest contributor to the national 
GDP, with the State of Minas Gerais, a distant second, contributing 
10 percent of the national GDP. 
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