Neoenergia, a subsidiary of Iberdrola, has secured a contract from Brazil’s electricity system regulator the Agência Nacional de Energia Elétrica (ANEEL) for constructing a 500kV substation in the state of Minas Gerais.

The contract was awarded to Neoenergia in a competitive transmission auction held at São Paulo stock exchange, with an objective to upgrade the country’s transmission networks.

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As per the terms of the contract, the company will be responsible for construction as well as commissioning of the substation in Ibiraci with an investment of more than $112m (€100m).

The project will feature the 500,000-volt Estreito substation with three -300/+300 Mvar synchronous compensators.

ANEEL has set March 2026 as the project completion deadline, however there is a possibility that this deadline could be brought forward.

During the construction phase, the project is expected to create approximately 1,700 direct and indirect jobs.

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Once completed, it will provide operational flexibility in critical scenarios of high energy imports by the Southeast region.

The high-voltage substation project is in line with the company’s strategy and expands its area of operation in the Southeast region.

Iberdrola said in a statement: “The new transmission projects set to be commissioned by the company over the coming years will follow the group’s efficiency strategy and produce a secure return for its shareholders, maintaining the focus on the business and generating an even more predictable cash flow.

“In addition, the group maintains its track record and commitment to investment and growth in the country.”

Through Neoenergia, the company manages 540,417km of distribution network and serves a population of 34 million people.

Neoenergia also has renewable energy of more than 3.7GW in operation that provides electricity services to 15.7 million customers.

Last month, Iberdrola started construction on the 800MW Vineyard Wind I offshore wind farm in Barnstable County, Massachusetts.