As a component of the Growth Acceleration Program [PAC], Banco Nacional de Desenvolvimento Econômico e Social [BNDES] approved, on January 25, 2007, an interest rate reduction to the segments of energy transmission and distribution, gas production and distribution, railways, ports, airports, roadways, sanitation and urban transportation.
Because of such initiative, the interest rates will be, in average, 60% lower than those in 2005. This is the second drop in interest rates carried out by BNDES within the last two years - the first one in the beginning of 2006 - with the objective of stimulating investments in the Brazilian economy. Total interest rate for BNDES loans is comprised of the Long-Term Interest Rate [TJLP] plus a basic fee, as in the table below, plus a credit risk rate, of up to
3.57% p.a., pursuant to the
beneficiary's risk.
BNDES Basic Fees
| Energy |
2005 |
2006 |
2007 |
% Variance (07/05)
|
| 1. Electric Energy |
| Generation |
| Hydro and Thermoelectric |
2.5% |
1.5% |
1.0% |
-60% |
| Structuring Hydro (over average 2000 MW) |
2.5% |
1.5% |
0.5% |
-80% |
| PCH, Gas Co-Generation, Bioelectricity |
2.5% |
1.5% |
1.0% |
-60% |
| Transmission |
2.5% |
2.0% |
1.5% |
-40% |
| Distribution |
3.0% |
3.0% |
2.0% |
-33% |
| 2. Renewable Energies |
2.5% |
1.5% |
1.0% |
-60% |
| 3. Gas |
| Gas development, production and processing |
2.5% |
2.0% |
1.5% |
-40% |
| Transport and distribution |
2.5% |
2.0% |
1.5% |
-40% |
| Logistic |
2005 |
2006 |
2007 |
% Variance (07/05)
|
| 1. Railway Modal |
| North and Northeast regions and bottleneck reduction |
2.5% |
0.0% |
0.0% |
-100% |
| Other Investments |
2.5% |
1.5% |
1.0% |
-60% |
| 2. Roadway, airway, port and terminal modals |
2.5% |
1.5% |
1.0% |
-60% |
| 3. Roadway concessions |
3.0% |
3.0% |
2.0% |
-33% |
| Urban Development |
2005 |
2006 |
2007 |
% Variance (07/05)
|
| 1. Integrated Urban Transportation |
3.0% |
2.0% |
1.5% |
-50% |
| 2. Environmental Sanitation |
3.0% |
1.5% |
1.0% |
-67% |
Particularly for generation structuring projects (1) - thermoelectric plants with a power over 2 thousand average MW -, BNDES took additional measures to guarantee energy supply giving support to the economic growth and to tariff reasonability:
1. Special reduction of the basic fee from 1.5% p.a. to only 0.5% p.a. (80% drop), which minimizes financing cost over the tariffs;
2. Increase in the total financing repayment term from 14 years to over 20 years for the hydroelectric plants over 1 thousand MW. This is the longest term ever used to finance energy generation work in Brazil, exceeding the 20 years granted to Itaipu financing (1978 to 1998). Repayment deadline for projects below 1 thousand MW goes from 14 to 16 years.
3. Financing under the Project Finance modality, which exempts corporate guarantees from the finance applicants, that is, the financings will be supported by the energy sales agreements and risk mitigating insurance, aiming at ensuring completion of the work. This modality will allow private groups to undertake works without burdening their balance sheets with financial debts.
For all hydric generation projects [UHE], BNDES maximum share on total investment has been expanded from 80% to 85%. Jointly, these measures extend the universe of those potentially interested in infrastructure projects, allow a reduction in tariffs for new energy projects in relation to the prevailing conditions in 2005, and aim at stimulating investments in large projects.
(1) Structuring Project: a project able to generate impact in the development of a certain area or region, by creating economic conditions to attract other projects, and multiple-sector and integrated operations, arising from institutional articulated
actions.
Special Conditions Applicable to the Electric Energy Sector
Maturity
For the electric energy sector, the grace period is up to six months after the commercial start-up
operation. Interests may be capitalized during the grace
period.
The maximum repayment terms are defined at the table
below:
| Segments |
Maximum Repayment Terms |
| 1. Generation |
| Hydric [UHEs] with installed capacity equal or over 1,000 MW |
20 years |
| Hydric (UHEs) with installed capacity over 30 MW and under 1,000 MW |
16 years |
| Small Hydroelectric Plants [PCHs] |
14 years |
| Eolian 14 years |
| Thermoelectric, Gas Co-generation and Bioelectricity |
14 years |
| 2. Transmission |
14 years |
| 3. Distribution |
6 years |
|
![Growth Acceleration Program [PAC] - Better credit conditions to infrastructure](images/t_pac.gif)