Brazil development bank funds 1,087-MW Estreito

Brazil’s national development bank has approved financing of 2.6 billion reais (US$1.4 billion) for construction of the 1,087-MW Estreito hydroelectric project on Brazil’s Tocantins River.

Banco Nacional de Desenvolvimiento Economica e Social (BNDES) said December 20 the funding would be provided to the companies forming the Estreito development consortium Consorcio Estreito Energia (Ceste). The consortium awarded a 230 million euro (US$326.6 million) contract in October to Impregilo of Italy and OAS Engenharia of Brazil to build the project’s dam and powerhouse. (HNN 10/17/07)

BNDES said it will provide 72.6 percent of the total project investment of 3.6 billion reais (US$2 billion).

Consortium member Renova Energia Renovavel, a unit of Suez Energy South America, is to receive from BNDES 1.049 billion reais (US$590.8 million), half directly and half indirectly. Those resources will be refinanced by Unibanco, Itau-BBA, Bradesco, and Banco Votorantim.

Consortium member Companhia Vale do Rio Doce will receive financing of 808.3 million reais (US$455.2 million), Alcoa Aluminio will receive 687.3 million reais (US$387.1 million), and Camargo Correa will receive 116.2 million reais (US$65.4 million).

Estreito construction started in early 2007 and is expected to be complete in late 2010. In a government-organized power auction October 16, a pool of electricity distributors bought 256 MW from Estreito at a maximum price for delivery between 2012 and 2042. (HNN 10/18/07)

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