BRASILIA, July 22 A plan by BNDES, Brazil's
state development bank, and a pool of commercial banks to lend
an additional 6.5 billion reais ($2.9 billion) in emergency
credit should help electricity distributors cope with higher
power costs amid a drought, the president of industry watchdog
Aneel said on Tuesday.
Reuters reported on Monday that 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 15 banks.
New financing for Brazil's ailing power companies comes as
cash from a 11.2 billion real credit in April ran out recently.
The loan would go to the CCEE, a privately held entity in charge
of buying and selling electricity in the spot market. It would
subsequently funnel money into the coffers of Brazilian power
distributors, said Aneel president Romeu Rufino.
The loan should "in principle" be enough to help
distribution companies pay higher power costs in the spot
market, Rufino told reporters in Brasilia. He noted that, unless
the companies have money to settle their power purchase bills by
July 31, CCEE would be forced to delay settling the bills, he
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 hike rates before the October
A drought has reduced 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 been forced to buy spot market power, much of
it generated by expensive natural gas or fuel oil, to meet
The group of banks that participated in the prior deal
included 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.
It was not immediately known which banks would be in the new
Rufino said terms of the new loan would be identical to the
one extended in April. Under conditions of the April
transaction, banks pegged the debt to receivables linked to
utility bills, with repayment scheduled to begin as early as
($1 = 2.23 Brazilian reais)
(Reporting by Leonardo Goy; Writing by Guillermo Parra-Bernal;
Editing by Jeffrey Benkoe)