Washington DC, February 23, 2006.-The
International Finance Corporation will provide $130 million to the TermoFortaleza
Power Project, located in the northeastern Brazilian state of Ceará. The
thermal power plant will contribute to the expansion of thermal power capacity
and provide power to approximately 7.4 million people in one of the poorest
regions of Brazil, that has been most affected by Brazil’s energy crisis.
TermoFortaleza is a 310.7 MW gas-fired power plant located in the municipality
of Caucaia, in Ceará, Brazil and is being developed by Endesa Internacional,
a wholly owned subsidiary of Endesa S.A. of Spain, who has to date, (including
the TermoFortaleza project), invested over 1,000 MW of generation capacity
in Brazil. The project is included under the Thermal Power Priority Program
(PPT) launched by the Brazilian government in 2000 to provide a more optimal
balance of the country’s sources of energy supply by increasing thermal
generation capacity, and thereby reducing Brazil’s dependence on hydropower.
IFC’s long-term financing consists of a $55.5 million loan and a $7 million
subordinated loan for IFC’s own account and a syndicated loan of $67.5
million. The syndicated loan portion was significantly oversubscribed,
and IFC is pleased to collaborate on this transaction with Banco Santander
Central Hispano S.A., Banco Bilbao Vizcaya Argentaria S.A., and Caixa Geral
de Depositos S.A., who have fully subscribed to this financing.
In 2001, an energy crisis in Brazil imposed emergency rationing measures
on a significant part of the population, in an effort to reduce electricity
consumption by an average of 20% to avoid power cuts. Since then,
the financing of power projects, has become a cornerstone of IFC’s strategy
to increase the capacity and reliability of Brazil’s power generation.
Francisco Tourreilles, IFC's director of infrastructure, said, “The TermoFortaleza
power project is an important investment in Brazil’s power sector, but
particularly in the northeast region, as it will add reliable generation
capacity to an area most affected by the 2001 energy crisis. This
investment demonstrates the significant potential that exists for governments
and the private sector to join efforts in developing critically needed
Atul Mehta, IFC’s director for Latin America and the Caribbean, also noted,
“This project supports the Government’s efforts to ensure a better hydro-thermal
mix in the country’s power system, and will promote private sector investments
in a sector that is key to the sustained growth of Brazil’s economy.”
IFC in Brazil
During fiscal year 2005, Brazil received the largest amount of IFC financing,
in US dollar value, among Latin American countries. IFC made investments
of $591million, including $190 million in syndications, in sectors ranging
from agribusiness and transportation to manufacturing and the financial
markets. IFC’s total portfolio in Brazil was $913 million at June 2005.
IFC's strategy for Brazil focuses on enhancing clients' prospects for competitiveness
and growth, improving the country's social equity through voluntary actions
by the private sector, and continuing to promote sustainability.
These priorities entail investing in growing, export-oriented companies;
helping Brazilian companies expand internationally (including through South-South
investments); emphasizing infrastructure and logistics, notably public-private
partnerships that expand services to poorer people; and helping build financial
and capital markets. IFC also seeks to finance firms committed to environmental
and social sustainability, to help improve corporate governance, and to
support microfinance and socially-oriented entrepreneurship. Since 1956,
when Brazil joined IFC, the Corporation has provided $7.45 billion, including
syndications, for 162 companies.
The International Finance Corporation is the private sector arm of the
World Bank Group and is headquartered in Washington, D.C. IFC coordinates
its activities with the other institutions of the World Bank Group but
is legally and financially independent. Its 178 member countries provide
its share capital and collectively determine its policies.
The mission of IFC is to promote sustainable private sector investment
in developing and transition countries, helping to reduce poverty and improve
people’s lives. IFC finances private sector investments in the developing
world, mobilizes capital in the international financial markets, helps
clients improve social and environmental sustainability, and provides technical
assistance and advice to governments and businesses. From its founding
in 1956 through FY05, IFC has committed more than $49 billion of its own
funds and arranged $24 billion in syndications for 3,319 companies in 140
developing countries. IFC’s worldwide committed portfolio as of FY05 was
$19.3 billion for its own account and $5.3 billion held for participants
in loan syndications. For more information, visit www.ifc.org.