Eletrobras sale could raise $20 bln for Brazil govt, ministry says

BRASILIA, June 22 (Reuters) - The privatization of Brazilian power giant Eletrobras will be the biggest in the country's history, with proceeds from the sale potentially reaching 100 billion reais ($20 billion), the Economy Ministry said on Tuesday.

The lower house of Congress on Monday approved a bill allowing the privatization, sending the measure to President Jair Bolsonaro for his signature.

The government-proposed bill would privatize Latin America's biggest power utility, known formally as Centrais Eletricas Brasileiras SA, by floating shares on the stock market, with the state relinquishing control by diluting its 61% stake.

"The operation, resulting from the primary offering, initial concession fees and the potential sale of the remaining shares, could represent around 100 billion reais to the public coffers," the Economy Ministry said in a statement.

The government expects to raise about 25 billion reais from the initial share sale, with the proceeds paying for the renewal of concessions for Eletrobras hydroelectric plants and transmission lines.

Eletrobras will be privatized at a time when Brazil is facing the threat of electricity rationing due to the worst drought in nearly a century. Thermoelectric plants are working at capacity generating more expensive power.

Critics of the privatization bill said it would lead to more costly electricity. But citing Mines & Energy Ministry base case estimates, the Economy Ministry said on Tuesday that tariffs "for all Brazilians" will be reduced by 6.3%.

"Although this number has yet to be revised ... it is clear that the tariff reduction will be significant," the statement said.

($1 = 5.03 reais) (Reporting by Jamie McGeever Editing by Bernadette Baum)