U.S. clean energy and carbon credit developer Econergy International has received a loan of 55.6 million reais (US$31.8 million) from Brazil’s development bank for construction of the 19.8-MW Areia Branca hydroelectric project in Brazil’s Minas Gerais State.
Econergy said January 9 it signed a construction and non-recourse long-term take-out loan agreement with Brazil’s Banco Nacional de Desenvolvimento Economico e Social (BNDES) covering 66.4 percent of the total project cost. The loan carries a term of 14 years, post an initial grace period on payment of interest and principal during construction and six months after commercial operation.
The loan has an initial interest rate of 8.75 percent based on the long-term interest rate in Brazil plus 2.5 percent.
Upon operation, expected in October 2008, Areia Branca is to generate 97,412 MWh. Project operator Hidreletrica Areia Branca has a 20-year power purchase agreement with national utility Centrais Eletricas Brasileiras S/A (Eletrobras).
In 2006, Econergy agreed with HydroPartners LLC to invest US$16.8 million for at least 85 percent of Areia Branca and 45 percent of the 20-MW Pipoca project, also in Minas Gerais State. (HNN 9/6/06)
Econergy has 40 clean energy projects under development throughout Latin America that might sell carbon credits under the United Nations-authorized Clean Development Mechanism (CDM) program. CDM is intended to reduce emissions of greenhouse gases thought to contribute to global warming.