Brazil bank signs its largest loan, for 3,300-MW Jirau

Brazil’s national development bank gave final approval to the largest loan in its history, 7.2 billion reais (US$3.5 billion) for construction of the 3,300-MW Jirau hydroelectric project on Brazil’s Madeira River.

The action, announced by project partner GDF Suez July 6, 2009, finalizes the loan first approved in February by Banco Nacional de Desenvolvimento Economico e Social (BNDES). (HydroWorld 2/20/09)

BNDES funded 68.5 percent of the total investment. It will directly grant 3.6 billion reais (US$1.78 billion). It will grant an additional 3.5 billion reais (US$1.7 billion) through the following banks: Banco do Brasil, Caixa Economica Federal, Bradesco BBI, Itau-Unibanco, and Banco do Nordeste do Brasil.

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.

Brazil’s environmental agency granted a license June 3 to the project, allowing stalled work to resume at the construction site on the Madeira River. (HydroWorld 6/5/09) President Roberto Messias Franco of the federal environmental agency, Instituto Brasileiro do Meio Ambiente (Ibama), signed a license for Jirau containing 54 conditions.

The financing is even larger than the 6.1 billion reais (US$3 billion) BNDES awarded in December 2008 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. (HydroWorld 12/30/08)

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.

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