* Loan is largest in BNDES history
* Controversial Belo Monte dam to cost nearly $14 bln
* Belo Monte to be world's 3rd-biggest hydroelectric dam
RIO DE JANEIRO, Nov 26 Brazil's state
development bank, BNDES, said on Monday it has approved a loan
of 22.5 billion reais ($10.8 billion) to Norte Energia SA, the
group building the controversial Belo Monte hydroelectric dam in
The loan is the largest in the bank's history and will
finance nearly four-fifths of the dam project, estimated at 28.9
Forty percent of the loan, or 9 billion reais, will be
funneled through two banks - 7 billion reais through Brazil's
state-owned Caixa Economica Federal (CEF) and 2 billion reais
through Brazilian investment bank BTG Pactual SA.
The Belo Monte dam on the Xingu River has a maximum designed
capacity of 11,233 megawatts, or 33 percent of Brazil's
projected new generation capacity between 2015 and 2019.
The government considers the dam essential for Brazil to
meet the power needs of an expanding economy and for limiting
the need for fossil fuels such as oil, natural gas and coal.
Environmentalists say the dam, along with the workers and
roads needed for its construction, will threaten fragile
ecosystems and the livelihood of local farmers, fishermen and
Belo Monte is designed to be the world's third-most powerful
hydroelectric dam after China's 22,000 megawatt Three Gorges
project and the 14,000 megawatt Itaipu dam on the
At full tilt, the dam will generate enough electricity to
supply 60 million people, or 30 percent of Brazil's population.
Because the dam will use water power from the river's flow
instead of a large artificial reservoir, it will only have an
average potential of about 4,500 megawatts, less than half the
Norte Energia is a consortium of state-led electricity
holding company Eletrobras, Neoenergia, a
Brazilian utility headed by Spain's Iberdrola, and Cia
Energetica de Minas Gerais, a utility controlled by
the government of Brazil's Minas Gerais state.
Other consortium partners include Brazilian utility Light
Servicos de Eletricidade SA, mining company Vale SA
, the world's largest iron-ore producer, Vale-backed
Brazilian-Chinese iron-ore pellet producer Sinobras, and J.
Petros, the employee pension fund of Brazilian state-led oil
company Petrobras and Funcef, the employee pension
fund of CEF are also partners.