Jirau Hydro Lands Jumbo BNDES Loan

Energia Sustentavel do Brasil (ESBR), a special purpose entity in charge of financing and building the 3,300MW Jirau power project on the Rio Madeira in the Amazon, has been approved for a BRL7.2bn financing package from the BNDES. The development bank will disburse BRL3.635bn directly to ESBR, while the remaining BRL3.585bn will be distributed via a group of Brazilian banks, including Banco do Brasil, Caixa Economica Federal, Bradesco BBI, Unibanco and Banco do Nordeste do Brasil. The 25-year loan is backed by receivables to be generated by the power facility. The portion to be directly disbursed by the BNDES has a 5-year grace period and 20-year amortization period, and pays TJLP, which today stands at 6.25%, plus 50bp, plus an undisclosed credit spread, according to a BNDES official. For the funds to be distributed by banks, the spread may be different, depending on the on-lenders. The financing accounts for 68% of the total required, with the remainder to be sourced from ESBR, presumably in the form of equity. Project sponsors Suez, Eletrosul, Companhia Hidro Eletrica do Sao Francisco and Camargo Correa, have not yet disclosed details. The Jirau project is among the chief infrastructure initiatives of the Brazilian government as outlined in its national growth plan.