Oct 16, 2012

The board of directors at the BNDES approved R$ 1.8 billion in financing to build a transmission line and two substations that will connect power generated at the Madeira River Hydroelectric Plant to the National Interlinked System. Resources have been earmarked for the Special Purpose Company (SPC) called Interligação Elétrica do Madeira, which was put together by the Companhia de Transmissão de Energia Elétrica Paulista (CTEEP), Companhia Hidro Elétrica do São Francisco and Furnas.

Investments to the tune of R$ 3.5 billion will generate close to 4,400 direct jobs, 7,000 at the peak of Works and another 38,00 indirectly, especially those connected to national production of machinery and equipment, and those in the foodstuff and accommodation sectors. The transmission line, which will stretch 2,300 kilometers, will cross five Brazilian states (Rondônia, Mato Grosso, Goiás, Minas Gerais and São Paulo) and some 84 municipalities between Porto Velho (RO) and Araraquara (SP).

The continuous current technology used in the line is the most economically advanced and feasible for long-distance transmission, as there is no need to build intermediary substations along the distance covered. Currently, only power from the Itaipu plant is transmitted using this technology in Brazil. The Madeira line will be the longest continuous current in the world is one of the largest works in the Growth Acceleration Program (PAC).

Financing from the BNDES also includes support for social investments in communities surrounding the plant. Voluntary efforts are also included to generate jobs and income; capacity-building and training for local workers; urban, transport, social, educational and health infrastructure.

Debentures – The project may also have resources from infrastructure debentures issued by the SPC in the maximum amount for fundraising: R$ 350 million. In this case, guarantees for the BNDES approved financing will also be shared with debenture investors, increasing investor security. Should the company opt to not issue debentures, it is expected to come up with its own resources in the same amount as that stipulated for fundraising.

The operation is part of the new measures adopted by the BNDES to boost the issuance of corporate debentures, seeking to expand the resources available for investments in infrastructure projects in the country and to help develop the capitals market.