Brazil’s Eletrobras has agreed to a BRL3.8bn ($1.9bn) loan to help fund construction of the Angra III nuclear power plant, it says. The 20-year facility provided by Caixa Economica Federal comes with a 5-year grace period and pays 6.5%. The loan will finance part of the construction of the 1,027 megawatt third reactor at the company’s Angra dos Reis power station.
Category: Project & Infrastructure Finance
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DEAL OF THE YEAR: Project/Infrastructure Financing
Terminales Portuarios Euroandinos Paita $110m 2037 Bond
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Infrastructure Investment: Into the void
Traditional sources of funding may have retreated, but a range of new capital providers is rapidly taking their place for financing infrastructure
Posted inDaily Brief
MPX Hooks BNDES Project Funds
MPX is to receive a BRL888m ($423m) project financing package from BNDES, the Brazilian power generator says. Proceeds would go toward construction of the Usina Termeletrica Parnaiba I, a 70%-30% joint venture with minority partner Petra Energia. The 14-year funds include a BRL204m tranche at IPCA plus BNDES long-term risk spread plus 1.88%, BRL671m at TJLP+1.88% and BRL12m at TJLP. The 676 megawatt project is funded with 70% debt. BNDES’ investment arm held an 11.7% stake in MPX as of June.
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BNDES Writes Big Hydro Check
BNDES is providing BRL22.5bn ($10.8bn) in 30-year funds for the 11,233 megawatt Monte hydroelectric plant, the development bank says. It is directly funding BRL13.5bn to the Norte Energia special purpose company, with a portion of the funds also routed through Caixa Economica Federal (BRL7bn), and BTG Pactual (BRL2bn). The TJLP-based interest rate is not disclosed. The disbursement of funds is expected to follow the construction schedule, with the first of the plant’s 24 turbines due to come online in 2015 and the last by 2019. BNDES will also put some BRL3.2bn toward social and environmental projects, it says. “This is the largest amount ever approved by the bank for socio-environmental initiatives, equivalent to 11.2% of the total resources invested in the plant,” BNDES says. The project’s total investment is expected at BRL28.9bn.
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Vale Scoops up BNDES Funds
Brazil’s BNDES has agreed to lend Vale BRL3.9bn ($1.93bn) to improve logistics operations in the country’s north, the development bank says. The amount represents almost half of an BRL8bn investment Vale is making to improve a rail link connecting its Carajas mine in the state of Para to the Ponto da Madeira seaport in Maranhao, and for expansion of the seaport itself. In all, it hopes to improve its transportation capacity in the region by 30%. The project is scheduled to begin in 2014, with disbursements throughout construction. Officials at BNDES and Vale decline to offer details of the loan.
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FPSO Loan Nears Close
Sponsors of a Brazil-bound floating production, storage and offload (FPSO) project are close to finalizing a 12-year $1.05bn loan, with closing expected this week, according to sources familiar with the transaction. Quieroz Galvao Oleo e Gas, SBM Offshore and Mitsubishi are building the vessel, the Cidade de Ihlabela, now under construction in China, which has a service contract with Petrobras. The term covers construction – the FPSO is expected online in 2014 – plus 10 years, and the facility can be upsized to as much as $1.2bn. Sumitomo, Rabobank, ING and Bank of Tokyo-Mitsubishi are leading the transaction, followed by a tier that includes Mizuho and others, with more than 10 mostly European and Japanese banks participating in total. Additional terms on the facility have not been released. Loan bankers are hopeful that completing sizeable transaction will demonstrate that there is appetite for this type of project financing and boost activity in the project finance market.
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Acciona Wind Farms Aim for Project Bonds
Two units of Spain’s Acciona are set to begin investor meetings this week ahead of what bankers and analysts say would be LatAm’s first wind energy project bonds. Looking to replace debt initially done in the loan market, the BBB minus rated Oaxaca II and Oaxaca IV projects are seeking respective $164.5m and $167.5m 2031 bonds with an average life of 13 years, according to sources familiar with the process. The key for moving funding away from the bank market is the operating projects’ lack of construction risk, as well a strong track record for wind generation nearby, most notably the Eurus facility also developed by Acciona. “This model has been used in many locations around the world,” Alberto Santos, analyst at Fitch, tells LatinFinance, including the US and Europe. He says the issuers’ investment grade rating reflects the location, proven technology and Acciona’s international status. In addition to being the region’s first wind project bond, he notes it is also unusual to have two separate transactions for a pair of wind farms that are nearly identical. The most recent comparable transaction, bankers say, might be a US solar power bond closed in February. Berkshire Hathaway-sponsored Topaz Solar’s $850m BBB minus rated 5.75% 2039 bond now trades inside of 5.50%. That the CFE is locked into a 20-year power purchase agreement is another strength of the Oaxaca deal, Fitch notes. Bankers suggest pricing should be viewed as a spread to CFE, just as the recent Brazilian drillship project bonds were viewed as paying spreads to Petrobras. “Financing construction in the bank market and replacing it later in the bond market is a template we should see more of,” says a banker on the deal. This has already been done with other assets, such as the drillships, he notes, and makes sense given the limitations on bank funding in recent years. The Oaxaca roadshow begins today in Boston, and visits New York, Chicago and Los Angeles through July 24, with additional meetings pos
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BNDES Approves Hydroelectric Loan
Triunfo Participacoes e Investimentos subsidiary Rio Canoas Energia is to receive a BRL368m ($178m) loan from BNDES, it says. The 16-year amortizing loan pays TJLP+2.34% and will be used for construction of the Garibaldi hydroelectric plant, as well as to repay a bridge loan. The plant, which is located in Brazil’s Santa Catarina state, will have an installed capacity of 192 megawatts and is expected to come on line in the second half of 2013.
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Brazilian Miner Seeks Development Bank Funds
Brasil Exploracao Mineral (Bemisa) is targeting development bank funding for a BRL3bn ($1.45bn) iron ore project, according to Sudene, a development agency for Brazil’s northeast. Sudene and the FDNE northeastern development fund would be among the lenders to the mine, located in the state of Piaui. A BRL5.4bn rail transport project, also getting Sudene support, would transport the project’s production.