December 27, 2012 / 4:26 PM / 5 years ago

Eletrobras to get $1.9 bln Caixa loan for Brazil nuclear plant

* Loan to help pay for Angra III nuclear reactor

* Angra has been under construction for three decades

RIO DE JANEIRO, Dec 27 (Reuters) - Brazil’s state-led power utility Centrais Eletricas Brasileiras signed a 3.8-billion-real ($1.9 billion) loan accord with state-owned bank Caixa Economica Federal to finance the construction of a nuclear reactor, the utility said on Thursday.

The loan will finance part of the construction of the third thermonuclear plant at the company’s Angra dos Reis power station about 100 kilometers (62 miles) west of Rio de Janeiro, the utility, known as Eletrobras, said in a statement.

The 20-year loan will pay annual interest of 6.5 percent, the company, Latin America’s largest utility said. The loan is guaranteed by Brazil’s government.

Eletrobras shares have lost about half their value since early September when the government announced a plan to renew expiring hydroelectric dam concessions early in exchange for cuts in power rates. Brazil has some of the world’s highest utility charges.

The cuts, expected to deliver reductions in consumer power rates of nearly 20 percent, have prompted concern that utilities may not be able to generate sufficient cash to finance expansion and maintenance and will see borrowing costs rise.

The 10-billion-real, 1,270-megawatt Angra III power reactor has been under construction for nearly three decades, according to Eletronuclear, Eletrobras’ nuclear-power subsidiary.

Angra III is the second of two reactors based on Siemens AG technology to be built under a 1975 accord with Germany, Eletrobras said on its Web site.

Angra III construction began in 1984. After stopping in 1986, building was restarted in 2010 under an agreement with France’s Areva, Eletrobras said. The project is also being financed by Brazil’s state-owned development bank BNDES.

Equipment for the Angra III reactor has been in storage since the 1980s. The first reactor at Angra, built using U.S.-based Westinghouse technology, began producing power in 1985. (Reporting by Jeb Blount; editing by Andrew Hay)

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