The Inter-American Development Bank (IDB), as of April 2008, was supporting several projects in the power sector in Brazil, notably the Renewable Energy Service Delivery Project: This project is a technical cooperation that seeks to implement several pilot projects on renewable energy services to isolated communities in Brazil.Law No. 10,438, of April 26, 2002, created an incentive program for renewable energy called PROINFA (Programa de Incentivo às Fontes Alternativas de Energía), aimed at stimulating the development of wind, biomass and small hydro plant projects in Brazil. Such program provided for the guarantee of energy purchases by the state-owned corporation Eletrobrás, under 20-years’ power purchase agreements, at attractive prices and exemptions or discounts in the payment of certain power sector charges. At the same time, the Brazilian Development Bank - BNDES (Banco Nacional de Desenvolvimento Social e Econômico) and other financial institutions, made available to these projects, long-term credit facilities. PROINFA was originally conceived to include two phases, the first one having already taken place, representing 144 renewable energy projects.In the first phase, the Program calls for the generation of 3,300 MW of renewable energy with a national business participation rate of 60%, aiming to maximize the country’s regional potentials, create jobs, reduce CO2 emissions through thermal (fossil) displacement, and promote energy contracts with differentiated conditions for conventional sources, as well as a specific tariff/MWh for each source. The second phase fixes a 90% nationalization rate and a 15% Brazilian electrical energy annual consumption rate to be supplied by these sources. The goals of this phase are expected to be reached within twenty years, and the price will be a weighted average between competitive hydroelectric and thermoelectric (natural gas) prices.PROINFA as described in the Decree No. 5025, 2004, was established in order to increase the share of electricity produced by projects designed based on wind power, biomass and small hydro hydropower (SHP) in the National Interconnected System (SIN). According to Law No. 11,943 of May 28, 2009, the deadline for the start of operation of these projects ends on December 30, 2010.As part of an overarching strategy to guarantee long-term economic growth, Brazil’s Government continues to focus heavily on investing in improving energy efficiency and sustainability. In this regard, Brazil’s National Development Bank - Banco Nacional de Desenvolvimento Economico e Social (BNDES), the Brazilian Innovation Agency - Financiadora de Estudos e Projetos (FINEP) and the National Agency for Electricity - Agencia Nacional de Energia Eletrica (ANEEL) announced in 2013 the launch of the Inova Energia Program (the “Inova Program” or the “Program”), which provides a series of subsidies and other incentives to assist Brazilian companies and technology institutes to develop and commercialize innovative technologies for the power sector, including solar power, smart grids and energy-efficient vehicles.This article provides an overview of each of the three areas, namely (i) smart grids; (ii) solar and wind energy; and (iii) hybrid and energy efficient vehicles, which are expected to benefit from the Inova Program (each of these three areas are also referred to as “themes”). The article also briefly describes the goals established by the Brazilian Government for the implementation of the Program, and the current status of the Program.The Alternative Energy Auction of July 2011 (Regulation Portaria MME 113 of Feb 1, 2011) authorises ANEEL, the national electricity regulator, to organise alternative energy auctions, and sets pre-qualification criteria for developers participating in the auctions. The Government has also sought to reform the biodiesel auction framework to include a resubmission procedure to stimulate competition, and an updated IT framework for ANEEL to process bids more efficiently, including a web-based bidding process.Brazil has already awarded more than 3GW of renewables capacity in 2013, with 15GW of wind and 3GW of solar projects registered for November’s A-3 auction and more than 20GW of renewables projects competing in December’s A-5 tender. With average wind prices less than US$50/MWh, this is welcoming result for the fledgling solar sector along with possible solar-only auctions in 2014. More than 150 companies have entered the market in anticipation of a solar boom, though Government support remains critical.