ANNOUNCEMENT 24 Oct 2019

The National Bank for Economic and Social Development of Brazil (i.e. BNDES by its acronym in Portuguese) approved a loan of BRL 1.26 billion to Engie Brasil.

NUMBER OF INTERVENTIONS

2

  • 2 harmful
  • 0 neutral
  • 0 liberalising

SOURCE

National Bank for Economic and Social Development. Banco Nacional de Desenvolvimento Econômico e Social. Últimas Notícias. "BNDES aprova financiamento de R$ 1,26 bi para Complexo Eólico na Bahia" de 24/10/2019. Available at: https://www.bndes.gov.br/wps/portal/site/home/imprensa/noticias/conteudo/bndes-aprova-financiamento-de-para-complexo-eolico-na-bahia/!ut/p/z1/tVVNc9owEP0tPfgotNjyV28uMZBgyrQJIfjCyLaM1WLJsQWk_74yZaZpU5y0FF80llbv7T7tk3CMH3As6I6vqeJS0I3-X8bOKvIn4ZjMIAL7jkBwZblk7oYw8Uy8OATAiS8AHJ_eT4aA73GM41SoShV4mYiMNSsuGsXVNj1kYEAhS2YAL6uaiYYaIKTiKaeNAakUim0zacBhI6JVLXcU5VxQoSNKJpREGUMVrSlKZVlt2JNETG54KpGgKKEFpy1_lfIML23PTgAyE5l-kiPCchv5aR8QSUxCCLX6eWId6-0oKH6LXh0Bcbecizbf5wizayuEYDyIbBJO-iPfOgZ0HcmvCKOryIQgsocw_PRxFAYmXuok3dNF9vFix9kez4WsS90ktz81dB3wIc0y5PSJVg6oiXzbyZCbU0pMveqkCR7DC4bbD5ZmcK_taOTD2HTPZOgu4N65LLx9Wfhzxbl5zZPa9PzL42McaGe2FntS-OGvrNlSrDcy-XGBBCKxvDWOa5azmtW9ba2nC6Wq5r0BBuz3-94BvbeWu15S65lKm7uStWo5Gq7YS6Y_4Ray0Yn-Dtet5sSzTqv5pguhG35mXhbeviy8e1F4Qs6Ev3ntttVdYtbTwVR3SUVVgbjI5bGX__G1ONsb_-vZqsp56VnfOPr62dvf5cW6XE1Dyz4Om1258FS7UA6S58PCa4J33wGerXYq/dz/d5/L2dBISEvZ0FBIS9nQSEh/

Brazilian National Development Bank. Banco Nacional de Desenvolvimento Econômico e Social. Regulamento Geral e Metodologias Específicas. "Regulamento para credenciamento e financiamento de módulos e sistemas geradores fotovoltaicos" Availabe at: https://www.bndes.gov.br/wps/portal/site/home/financiamento/servicos-online/credenciamento-de-equipamentos/normas-aplicaveis-credenciamento/regulamento-credenciamento-financiamento-fotovoltaicos

Brazilian National Development Bank. Banco Nacional de Desenvolvimento Econômico e Social. ANEXO 1 - ETAPAS FÍSICAS E CONTEÚDO LOCAL QUE DEVERÃO SER
CUMPRIDOS PELO FABRICANTE. Available at: https://www.bndes.gov.br/wps/wcm/connect/site/10f19d81-33df-4c4c-95e0-d7909975c911/credenciamento_aerogeradores_anexo1.pdf?MOD=AJPERES&CVID=lmylw0v

Inception date: 24 Oct 2019 | Removal date: open ended

State loan

On 24 October 2019, the BNDES announced the approval of a BRL 1.26 billion loan (USD 314.1 million at the time of the announcement) to Engie Brasil Energia, a subsidiary of the French multinational Engie.

The objective of the resources is to finance the implementation of the Umburanas Wind Complex which consists of eighteen wind farms and their respective power transmission systems. This project mainly involves the acquisition of wind turbines, civil works and connection system.

The total costs of the projects are estimated at BRL 1.6 billion (circa USD 398.9 million) from which the resources provided by the BNDES represent 78.8% of the total. 

The resources provided by the BNDES have been distributed via the FINEM credit lines that provide resources of minimum BRL 10 million (USD 2.5 million) for projects with social impact, and have an annual interest rate made of the market value long-term interest rate, plus the credit risk rate plus the BNDES remuneration that ranges between 0.9% and 2.1%, depending on the purpose of the credit line and the social impact.

AFFECTED SECTORS

 

AFFECTED PRODUCTS

 
Inception date: 24 Oct 2019 | Removal date: open ended

Local sourcing

The finance conditions of the BNDES for energy project establish concrete local content requirements. In terms of wind power, the development bank establishes the following requirement from which at least three must be fulfilled:

  • At least 70% of the towers have to be manufactured in Brazil;
  • Manufacture of the Spades in Brazil;
  • Assembly of the cube in Brazil with the casting of local origin; and/or
  • Assembly of the wind turbine in Brazil.

Departing from the above mentioned, it can be concluded that the BRL 1.26 billion loan (USD 314.1 million at the time of the announcement) to Engie Brasil Energia is subject to local content requirements.