Brazil will provide 2.4 billion reais ($1.19 billion) of cheap loans and grants for renewable- energy research projects through 2016 as part of a government effort to spur investment in innovation.
Companies have until the end of July to submit proposals for projects that may include efficient power lines connecting remote hydroelectric dams in the Amazon or factories that make silicon for use in solar panels, said Ricardo Rivera, a manager at national development lender BNDES’s department for information technology and communication.
The Inova Energia program is intended to create a culture of innovation in Brazil’s energy industry, Rivera said in a telephone interview today. Many companies are wary of spending years developing new technologies in a country where hyper- inflation periodically wiped out profits in the 1980s and 1990s, he said.
“We’ve had big macroeconomic problems in Brazil, which have tended to take the spirit out of companies” seeking to innovate, he said. “We need companies to take risks on innovation.”
Banco Nacional de Desenvolvimento Economico e Social, as the development bank is officially known, and state innovation agency Financiadora de Estudos e Projetos will provide about 400 million reais of grants for projects, Rivera said. The remaining 2 billion reais will be loans with interest rates as low as 2.5 percent, or less than half Brazil’s benchmark interest rate known as Selic.
Companies that research technology in partnerships or focus on creating electronic hardware like microchips for wind turbines will more likely to receive grants instead of loans, he said.
BNDES and Finep will select the winning projects in November, he said. Both agencies will then conduct a credit analysis of the companies selected for loans that may take two months.
Agencia Nacional de Energia Eletrica, the power regulator, expects utilities to channel 600 million reais of funds they’re obligated to spend on research and development toward projects in the program, he said.
Projects that will be considered for funding will have to focus on one of three themes: Ultra-high-voltage electricity transmission and smart grids, wind and solar energy or energy- efficiency in vehicles.
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