— Guilman-Amorim Hydroelectric Plant —
WASHINGTON, D.C., May 11, 1998—The International Finance Corporation is
investing in the Guilman-Amorim Hydroelectric Power project, the first
Brazilian power plant financed on a project finance basis by the private
IFC’s investment in the pioneering hydroelectric plant totals US$121 million,
including a loan of US$30 million for IFC’s account and US$91 million
for the account of participants banks. Two large Brazilian conglomerates—Companhia
Siderurgica Belgo-Mineira S.A., a steel manufacturer, and Samarco Mineracao
S.A., an iron ore producer—supplied US$31 million of equity.
The 140-megawatt plant, located on the Piracicaba River in the State of
Minas Gerais will provide electricity to the sponsors, freeing up the overloaded
electricity distribution network in the south/southeast region and thus
supplying energy to about 280,000 people. Its annual output is expected
to average about 535 gigawatt-hours.
In Brazil, estimated needs far exceed current capacity. The energy deficit
in the south/southeast region is expected to reach 11 percent of demand
by next year because of delays in public-sector investment in power projects.
The Brazilian government in 1996 estimated that US$3.3 billion in new power-generation
investments would be required annually through 2005 to avoid energy shortages,
and most will have to come from the private sector.
Vivek Talvadkar, Director for IFC’s Power Department, noted that this
investment would contribute to the country’s economic well being as well
as help the sponsor companies be more internationally competitive. It
will also allow those companies to count on a reliable source of power
in the face of increasing shortages.
The project is consistent with IFC’s strategy to support projects that
can demonstrate the viability of private investments in newly opened infrastructure
sectors. IFC, part of the World Bank Group, fosters economic growth
in the developing world by financing private sector investments, mobilizing
capital in the international financial markets and providing technical
assistance and advice to governments and businesses.