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Transmission Lines Auctions of 2018

Objective

To support projects that aim to expand and/or modernize the infrastructure of electric power transmission in Brazil, tendered at 2018.

Who is entitled to request financial support

Companies with seat and administration in Brazil and legal entities governed by public law.

What is eligible to receive financial support

Projects of transmission lines and substations tendered at 2018.

Minimum loan amount

R$ 20 million. For lower values, refer to BNDES Automatic financing lines.

Note: Projects to be financed through BNDES Automatic lines should follow the financial conditions at the time of submission of the financing request.

Interest Rate

Direct support (financing directly with BNDES)

Interest rate = Cost of funds + BNDES’ margin + Risk spread where:

Composition of interest rates for direct support

Cost of funds = TLP (long-term rate) or IPCA referred cost*, at the customer’s discretion

BNDES’ margin = 1,3% p.a.

Credit risk spread = According to the customer/project rating and to the loan term

Indirect support (finance done by intermediation of commercial banks)

Interest rate = Cost of funds + BNDES’ margin + Financial intermediation rate + Commercial bank spread, as follows:

Composition of interest rates for indirect support

Cost of funds = TLP (long-term rate) or IPCA, referred cost*, at the customer’s discretion

BNDES’ margin =  1,3% p.a.

Financial intermediation rate = 0,23% p.a.

Commercial bank spread = Negotiated between the Commercial Bank and the customer/project.

(*) Fixed rate applied to the outstanding balance adjusted by the Consumer Price Index (IPCA, in Portuguese).

Also, refer to other rates charged in BNDES’ financing contracts.

BNDES’ maximum participation

BNDES’ maximum share will be up to 80% of the total project investment, restricted to the sum of all eligible items.

The project must have at least 20% of equity.

BNDES will be able to purchase infrastructure bonds issued by the project.

Financial maturity and charge system

The total loan term (comprised by the grace period and the amortization period) shall not exceed: 24 years and the last two years of concession contract.

The interest shall be capitalized during the grace period, which may be of up to six months after the beginning of the project into commercial operation, set forth at the time of the deliberation regarding the credit granting.

Amortization System: PRICE (Mortgage System) shall be adopted

Use of The Financial Terms

It is granted to the customer the application of the financial terms (meaning, the interest rate, maximum participation, and amortization maturity and charge system) described above, without excluding the possibility of BNDES to offer the financial terms existing at the time of project framework.

Loan Amount

Loan Amount shall be determined according to the project capacity of payment, observing the minimum Debt-Service Coverage Ratio (ICSD) of 2.0, assessed annually.

For the general start-up of the project, considering the debt with BNDES and any other creditors, including infrastructure bonds to be issued by the client, the global ICSD, measured annually, should be at least:

  • 1.3 from the first to the tenth year of amortization of the debt owed to BNDES;
  • 1.4 from the eleventh to the fifteenth year of amortization of the debt owed to BNDES; and
  • 1.5 during the remaining period of amortization of the debt owed to BNDES.

Contractual guarantees and obligations

Indirect support: negotiated between the accredited financial institution and the customer.

Direct support: Defined in the operation analysis, with the following highlights:

Personal guarantees: in case of bank guarantees required until the BNDES declaration of physical and financial completion of projects, they must have a minimum validity term of two years, renewable for at least one year and a half.

Dividends distribution: Dividends and interest on own equity (JCSP) may be distributed as follows:

  • Up to the completion: maximum amount equivalent to the mandatory minimum, limited to 25% of the Adjusted Net Income.
  • After the completion: amount may exceed 25% of the Adjusted Net Value, provided that:
    • there is no non-compliance with financial and non-financial obligations with BNDES, and
    • in the terms set forth in BNDES’ loan contract (i) there are annually audited financial statements, (ii) minimum ICSD has been performed in the previous year, and (iii) minimum ICSD performance is not impaired in the current year.

Debt Service Reserve Account: It shall be equivalent to three months of the projects debt service(s).

Find out more about guarantees of operations with BNDES’ resources.

Financing availability

This document presents the conditions available at BNDES for those who win the bidding processes from the Transmission Lines Auctions of 2018, and it does not necessarily imply the future winners of the bid have the right to obtain funding. Once the results have been approved and the concession contracts signed, the winners must apply for BNDES loans, which shall analyze the application and registration status of each applicant and potential guarantors, as well as all legal, economic and environmental aspects of the projects presented.

How to request

Credit applications are submitted to BNDES by the interested customer or by means of the accredited financial institution, through previous consultation, filled in according to standard guideline and information forms sent to:

Banco Nacional de Desenvolvimento Econômico e Social - BNDES
Área de Planejamento - AP
Departamento de Prioridades - DEPRI
Av. República do Chile, 100 - Protocolo - Térreo
20031-917 - Rio de Janeiro – RJ

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