Bloomberg News

Tractebel Gets $184 Million Loan for Free Market Wind Farms

May 10, 2012

Tractebel Energia SA (TBLE3), the Brazilian unit of GDF Suez SA, received 358 million reais ($183.9 million) from national development bank BNDES to build four wind farms that will sell energy in negotiated contracts instead of auctions.

The projects will have 115.4 megawatts of capacity and sell electricity to large power consumers like factories and supermarkets, the Rio de Janeiro-based bank said today in an e- mailed statement.

Most wind farms under construction in Brazil have sold their future energy production to distributors in government- organized auctions where developers bid down prices to a record low last year, Marcos Severine, an analyst at Sao Paulo-based Itau Unibanco Holding SA (ITUB:US), said today in a telephone interview.

“Auction prices are remunerating far less than free market contracts,” he said. Developers that sell energy on the free market get a 50 percent discount on a fee levied on using power lines, Severine said.

Utilities like Tractebel, Companhia Energetica de Minas Gerais (CIG:US) and Light SA (LIGT3) that own trading companies are better positioned to tap this growing market, Severine said. The companies purchase the power from their own wind farms and use the contracts to back long-term loans which are crucial to develop projects, he said.

The wind farms, called Fleixeiras, Guajiru, Mundau and Trairi, will come online next year, BNDES said.

BNDES, formally known as Banco Nacional de Desenvolvimento Economico e Social, approved 3.4 billion reais for wind projects last year, up from 257 million reais in 2008, according to the statement.

In one auction last August, developers agreed to sell power from wind farms at an average price of 99.54 reais a megawatt- hour, national energy agency Empresa de Pesquisa Energetica said in a statement. Free market contracts may offer as much as 160 reais, Severine said

To contact the reporter on this story: Stephan Nielsen in Sao Paulo at snielsen8@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net


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Companies Mentioned

  • ITUB
    (Itau Unibanco Holding SA)
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    • -0.22
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    (Cia Energetica de Minas Gerais)
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