Brazil’s national development bank has approved 7.2 billion reais (US$3 billion) in financing for construction of the 3,300-MW Jirau hydroelectric project on Brazil’s Madeira River.
Banco Nacional de Desenvolvimento Economico e Social (BNDES) said February 18 the financing was granted to Energia Sustentavel do Brasil (ESBR), winner of a concession to build Jirau in Brazil’s Amazon Region. Consortium members include Suez Energy South America Participacoes Ltda.; Eletrosul Centrais Eletricas S/A; Companhia Hidro Eletrica do Sao Francisco (CHESF); and Camargo Correa Investimentos em Infra-Estrutura S/A.
The financing is even larger than the 6.1 billion reais (US$2.5 billion) BNDES awarded in December to the 3,150-MW Santo Antonio hydroelectric project, Jirau’s sister project on the Madeira. At that time, BNDES said Santo Antonio received the largest financing granted to a single project in bank history. (HNN 12/30/08) BNDES said last month that hydroelectric sector lending would boost its total disbursements in 2009 to 12 billion reais (US$5.12 billion). (HNN 1/19/09)
Like Santo Antonio, Jirau is one of the most important projects being developed under Brazil’s Growth Acceleration Program (PAC), which provides more favorable financing to investors, BNDES said. It is expected to generate 12,000 direct jobs and 30,000 indirect jobs during construction, which is to be completed in 2014.
BNDES said it set requirements that will enable utility companies to provide affordable rates to consumers, once BNDES allowed a 21.5 percent discount in the concession bid. Seventy percent of the energy produced is to be sold into the regulated market under long-term contracts with 39 utilities, while the remainder will be sold in the free market.
BNDES said it funded 68.5 percent of the total investment. It will directly grant 3.6 billion reais (US$1.52 billion). It will grant an additional 3.5 billion reais (US$1.5 billion) through the following banks: Banco do Brasil, Caixa Economica Federal, Bradesco BBI, Unibanco, and Banco do Nordeste do Brasil.
BNDES said the financing includes 532 million reais (US$222.6 million) for 29 social and environmental programs with an estimated budget of 610.6 million reais (US$255.5 million). Social investments include 50 million reais (US$21 million) for job creation, human resources training, and social infrastructure such as health, education, leisure, transport, and safety.
ESBR announced in January that it had signed a US$410 million contract with Dongfang Electric Corp. International and Dongfang Electric Machinery of China for supply of 18 turbine-generators to the project. (HNN 1/29/09) It was announced in December that a consortium led by Alstom Hydro and including Voith Siemens Hydro Power Generation and Andritz Hydro (formerly Andritz VA Tech Hydro) also had won a 300 million euro (US$421.8 million) contract from ESBR to supply turbine-generators and other equipment for Jirau.
BNDES noted two other giant hydro projects are planned for the Madeira system, 800-MW Cachuela Esperanza on the tributary Beni River across the border in Bolivia, and the 3,000-MW Guaraja-Mirim project on the border between the two countries. (HNN 1/20/09)