ANNOUNCEMENT 08 Apr 2015

In April 2015, the government of Brazil announced a change in private-sector financial support.

NUMBER OF INTERVENTIONS

1

  • 0 harmful
  • 1 neutral
  • 0 liberalising
Inception date: No inception date

State loan

On 8 April 2015, the Brazilian Ministry for Mining and Energy announced the creation of a fund worth 20 billion real (USD 6.61 billion) for the development of electric power in the northeast region of Brazil. The goal of the investment is to increase electric power supply to power intensive industries.
 
For the past 70 years, the electricity sector received direct subsidies from the government. However, since contracts are expiring, the government preferred to create a closed investment fund to relieve the treasury.
 
The fund is going to be structured by Brazil's development bank's equity branch, the BNDESpar. 51% of the shares are reserved for investors and 49% for Brazil's hydroelectric company in the northeast of the country, Chesf (Companhia Hidro-Elétrica do Săo Francisco).
 
The GTA includes state guarantees and other financial incentives that are likely to affect the restructuring and performance of firms facing international competition, whether from imports, in export markets, and from foreign subsidiaries.

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