Brazil’s BNDES offers new financing conditions for projects in upcoming auction

Brazil’s National Bank for Economic and Social Development (BNDES) has published new conditions for the financing of projects that will compete in the upcoming A-4 auction, in which solar is included, and in the A-6 auction, in which solar has been excluded.

According to BNDES, the new rules introduce changes that offer more flexibility to entrepreneurs in their finance structuring. For instance, they will be able to choose between three types of interest rates: a long-term interest rate, called TJLP (Taxa de Juros de Longo Prazo); a different type of long-term rate, called TLP (Taxa de Longo Prazo); and another rate called IPCA currency (National Price Index for Consumer Amplo). BNDES confirms that project developers will now be able to evaluate which rate is the most convenient for structuring their business.

Furthermore, BNDES has announced that its maximum participation in the financing of projects will be 80% for all competing technologies. This represents the most relevant aspect of the new rules, as in the previous auctions, the participation of BNDES in the financing of projects was 80% exclusively for PV, while wind energy received 70%, and hydroelectric and thermal projects received barely 50%.

The financing of PV power plants by BNDES is linked to compliance with local content requirements. The first financing of this type was awarded to a 150 MW (AC) project of EDF Energies Nouvelles (EDF EN) and Canadian Solar companies located in the state of Minas Gerais. The plant incorporates equipment manufactured locally by Canadian Solar, in Sao Paulo.

The Brazilian government will hold the A-4 auction on December 18. In the competition, up to 1 GW of solar power could be assigned.