BNDES signs US$300 million contract to develop hydropower and other renewables

The Brazilian Development Bank (BNDES) announced it has signed a US$300 million contract with the New Development Bank (NDB) to add about 600 MW to Brazil’s generation capacity from hydropower and other renewable energy sources.

NDB is a financial institution that opened its current headquarters in Shanghi, China, in February 2016. NDB owners include: The Federative Republic of Brazil, the Russian Federation, the Republic of India, the People’s Republic of China and the Republic of South Africa — BRICS nations.

The initial capital subscribed to NDB in 2014 was $50 billion and the authorized capital was $100 billion, according to NDB.

BNDES said the agreement represents the beginning of a partnership that aims at the development of the renewable power sector, relying on hydropower (small hydropower plants), wind, solar, generation from biomass, biogas and agricultural waste.

Brazil has a renewable electric matrix in which more than 60% corresponds to hydroelectric generation.

The NDB loan to BNDES has maturity of 12 years with a grace period of 3.5 years and a Libor-based interest rate, according to the announcement.

In addition to the operation with BNDES, NDB has already announced two energy related operations with China, which totaled US$379 million; two others with India, in the amount of US$600 million; an operation with Russia worth US$100 million; and an operation with South Africa in the amount of US$180 million.

In mid-April, reported Brazil’s Ministry of Mines and Energy announced it will auction concession rights for five hydropower projects later this year.

The plants will be split into three lots, with the first including the 1.7-GW Sao Simao; the second including the 424-MW Jaguara, 408-MW Miranda and 380-MW Volta Grande; and the 14-MW Agro Trao in the third.

The auction for 30-year concessions is set to take place September 30.

An additional hydropower project that will increase energy production in Brazil includes a plant that is two or three years away from completion.

The 150-MW Itaocara hydro plant on the Paraiba do Sul River in Rio de Janeiro state is being developed by a consortium of Companhia Energetica de Minas Gerais (Cemig) and Light (a Brazilian power company) that should be online by 2019 or 2020.

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Gregory B. Poindexter formerly was an associate editor for

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