Brazil bank finances 25-MW Sitio Grande

Brazil’s national development bank has approved 101 million reais (US$45.9 million) in funding for the 25-MW Sitio Grande hydroelectric project and its transmission system, being built on Brazil’s Femeas River.

Banco Nacional de Desenvolvimento Economico e Social (BNDES) awarded the funds to Bahia PCH I, a special purpose company controlled by Brazilian utility holding company Neoenergia. Neoenergia, which acquired Sitio Grande in 2007 from Brascan Energetica, previously said it plans to commission the project in 2009. (HNN 2/29/08)

Located in Sao Desiderio, Bahia State, Sitio Grande is to receive support from BNDES corresponding to 74.7 percent of its total investment of 1.13 billion reais (US$516 million).

As conditions for approval, BNDES required the developer to implement an integrated management system to manage the investments. Bahia PCH I is to take into account work safety, occupational health, environment, and quality when carrying out construction.

The developer also is to collect data on the status of riparian forest and investments to reforest reservoir shores. BNDES said that activity might earn carbon reduction credits for the project.

In October, BNDES released the first 100 million reais (US$43.2 million) tranche of 121 million (US$52.3 million) financing approved for construction of two other small hydro projects by Neoenergia. (HNN 10/31/08) That funding went to the 20-MW Pirapitinga (or Pirapetinga) and 19-MW Pedra do Garrafao projects.

Neoenergia, a Brazilian unit of Spanish utility Iberdrola, controls Brazilian distribution utilities Celpe, Coelba, and Cosern, plus generating assets.

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