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Board of Brazil's Eletrobras OKs Petrobras debt renegotiation

The headquarters of Brazilian oil company Petrobras is seen in Rio de Janeiro November 14, 2014. REUTERS/Sergio Moraes

SAO PAULO (Reuters) - Brazil's state-run power company Eletrobras said on Friday its board had approved a plan to renegotiate 8.5 billion reais ($3.2 billion) in debt owed to state-run oil firm Petroleo Brasileiro SA (PETR4.SA).

Eletrobras said in a securities filing that the debt will be repaid to Petrobras in 120 monthly installments starting in February.

Under the terms of the plan, Brazil's Treasury will guarantee 4.3 billion reais of the amount, while the remaining 4.2 billion reais will come from a government development fund financed with taxes that consumers pay on their electricity bills.

(Reporting by Cesar Bianconi; Writing by Caroline Stauffer Editing by W Simon)