Brazil’s national development bank has signed a 24-year loan agreement with Suez Energy Latin America, a member of the consortium developing the 1,087-MW Estreito hydroelectric project on Brazil’s Tocantins River.
Suez said April 2 that the agreement with Banco Nacional de Desenvolvimiento Economica e Social (BNDES) was for 380 million euros (US$590.8 million). That represents Suez’s share of a total 2.6 billion reais (US$1.4 billion) in financing that BNDES approved last year for the Estreito development consortium, Consorcio Estreito Energia (Ceste). (HNN 12/31/07)
BNDES said it would provide 72.6 percent of the total project investment of 3.6 billion reais (US$2 billion).
Renova Energia Renovavel is the Suez subsidiary participating in the Ceste consortium. It is receiving half of the BNDES funding directly and the other half indirectly as refinanced by Unibanco, Itau-BBA, Bradesco, and Banco Votorantim.
Consortium member Companhia Vale do Rio Doce is to receive financing of 808.3 million reais (US$455.2 million), while Alcoa Aluminio receives 687.3 million reais (US$387.1 million), and Camargo Correa receives 116.2 million reais (US$65.4 million).
Estreito is being financed under Brazil’s Growth Acceleration Program (PAC). The new financing is granted under a more favorable financial cost to investors, BNDES said. It has reduced the basic spread to 1 percent per year, instead of the 1.5 percent that prevailed previously for such large endeavors.
A year ago, Suez and BNDES completed 570.2 million reais (US$277 million) in financing for the 243.2-MW Sao Salvador project, the first hydroelectric project to be financed under the PAC. (HNN 3/23/07)
Ceste awarded a 230 million euro (US$326.6 million) contract in October to Impregilo of Italy and OAS Engenharia of Brazil to build Estreito’s dam and powerhouse. Estreito construction started in early 2007 and is expected to be complete in late 2010.
In a 2007 government-organized power auction, a pool of electricity distributors bought 256 MW from Estreito at a maximum price for delivery between 2012 and 2042.
