National Bank for Economic and Social Development (BNDES) is expected to disburse 14.1 billion reais (about $4.56 billion) for projects in the electricity sector this year, up more than 50 percent from 2016, in evidence that the segment remains one of the priorities loans, a development bank executive told Reuters.
Projection comes after a sharp drop in disbursements last year to 9.2 billion reais (about $2,9 billion) and at a time when the Brazilian Congress has just approved a change in the bank’s loans that from 2018 should be linked to the Long Rate term (TLP).
With the new rate, which will replace the Long-Term Interest Rate (TJLP), the federal government seeks to reduce costs with subsidies on BNDES loans, since the TLP will be closer to the costs of raising funds by the Treasury in the market.
Carla Primavera, BNDES’ superintendent for the energy sector, said the bank had disbursed about 6.3 billion reais in the first half of the year to the industry, with a focus on wind farms.
“It is clear that the approval of TLP makes the bank focus on its role and the definition of its operating policy, but I do not imagine that energy backs or reduces our participation, even at a different cost of debt,” said Carla Primavera.
“Main message is that people continue with determination and interest in maintaining our relevant presence in the electricity sector, people imagine not having a setback, mainly in the renewable segment, that is not under discussion, is a priority and has always been, “he said.
Since 2003, loans approved by BNDES for electricity projects total 182.7 billion reais. Hydroelectric projects accounted for most of the operations, with 68.5 billion, while wind power plants accounted for 33.2 billion of them approved.