SAO PAULO, July 21 Brazilian state development
bank BNDES and a pool of commercial lenders could extend an
additional 6.5 billion reais ($2.9 billion) in emergency credit
to electricity distributors as drought causes power rates to
soar, newspaper O Estado de S. Paulo said on Monday.
BNDES, the main source of long-term corporate credit in
Brazil, would disburse 3 billion reais to the CCEE, the
country's spot market electricity clearinghouse, with the rest
coming from a group of 10 banks, Estado said, citing unnamed
New financing for Brazil's ailing power companies is coming
as cash from a 11.2-billion-real credit extended in April ran
out recently. Reuters reported this month that another loan was
already under discussion.
Neither BNDES nor Mines and Energy Ministry officials were
immediately available for comment.
Brazil's electricity sector is grappling with soaring spot
power costs amid the driest start of a year in decades and the
government's reluctance to increase rates before the October
A drought has reduced the power available from hydroelectric
dams, which is normally responsible for about 70 percent of the
country's electricity, against a backdrop of rising demand.
Distributors have had to buy spot market power, much of it
generated by expensive natural gas or fuel oil, to meet demand.
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, Estado reported.
The group of banks that participated in the prior deal
includes Banco Bradesco SA ; Itaú Unibanco Holding SA
; Banco Santander Brasil SA ; Grupo BTG
Pactual SA ; Citigroup Inc ; JPMorgan Chase & Co
; Credit Suisse Group AG ; Bank of America Corp
and state-run lenders Banco do Brasil SA and
Caixa Econômica Federal SA.
In the prior deal, banks pegged the debt to receivables
linked to utility bills, with repayment scheduled to begin as
early as next year.
None of the lenders had an immediate comment on the Estado
($1 = 2.23 Brazilian reais)
(Reporting by Guillermo Parra-Bernal; Editing by Lisa Von Ahn)