On Wednesday (4/26), in Brasília, BNDES and the New Development Bank (NDB) signed the first loan of the latter institution for projects in Brazil in the amount of US$ 300 million. The aim of the operation will be to support investments in renewable power generation.
The NDB loan, which will also have local contribution in the amount of US$ 300 million, represents the beginning of a partnership that aims at the development of the renewable power sector, relying on projects of wind, solar, hydropower (small hydropower plants) generation from biomass, biogas and agricultural waste. It is estimated that the loan will enable investments that will add around 600 MW to the Brazilian generation capacity.
BNDES will use the funds of NDB to diversify and increase its sources of funds and promote its existing financing lines for the alternative power sector, as it already does with the funds from other multilateral organizations and official credit agencies.
Brazil has a renewable electric matrix in which more than 60% corresponds to hydroelectric generation. However, although hydroelectricity is a renewable resource, the system tends to be increasingly exposed to the effects of climate change and periods of drought. In this context, the new partnership, as well as others already established with international organizations, seeks to foster alternative power by supporting the diversification of the electric matrix, and to increase the safety of the electrical system in the future, which will guarantee the electric supply for all sectors of the economy.
The NDB loan to BNDES has maturity of 12 years with a grace period of three and a half years and a Libor-based interest rate.
In addition to the operation with BNDES, NDB has already announced two operations with China, which totaled US$ 379 million, two others with India, in the amount of US$ 600 million, an operation with Russia worth US$ 100 million, and an operation with South Africa in the amount of US$ 180 million.
About NDB – The New Development Bank, created in 2014, is a multilateral development bank operated by the BRICS countries (Brazil, Russia, India, China and South Africa). The bank is set up to promote greater financial and development cooperation between the five emerging partner markets. The main objective of NDB is to meet the financing needs of BRICS and other developing countries, complementing the funds of other development multilateral, regional and national banks, especially for investments in infrastructure and sustainable development.