| BRASILIA, March 20
BRASILIA, March 20 The Brazilian government is
helping arrange around 8 billion reais ($3.5 billion) in bank
loans to an electricity industry clearinghouse to help bolster
the finances of ailing power distributors, three sources with
knowledge of the situation told Reuters on Thursday.
The government is currently in talks with state-controlled
lenders Banco do Brasil SA and Caixa Econômica
Federal SA, and private-sector lender Banco Bradesco SA
for the loans, said the sources, who requested
anonymity because the talks are under way. Spokespeople for
Bradesco, Banco do Brasil and the government did not comment.
Caixa did not have an immediate comment on the deal.
The loan would go to the CCEE, a privately held entity in
charge of buying and selling electricity in the spot market,
which would subsequently funnel money into the coffers of
Brazilian power distributors. Companies in the electricity
sector are grappling with soaring spot power costs amid the
driest start of a year in decades and the government's
reluctance to hike consumer rates before the October
The ideal structure for the transaction, two of the sources
said, would be to borrow the money from a pool of banks and peg
the loan to receivables linked to utility bills. Repayment could
begin as early as next year, the sources said.
One of those sources said the peg to electricity bills would
act as a guarantee for the loan, making the deal far more
attractive for the banks.
Aside from the loan being negotiated, the National Treasury
will lend an additional 4 billion reais to distributors,
government officials said last week.
($1 = 2.33 Brazilian reais)
(Writing by Guillermo Parra-Bernal; Editing by Leslie Adler)