Washington, D.C., March 13, 2008—IFC,
a member of the World Bank Group, is providing a loan to support Companhia
Energética do Maranhão (CEMAR) in its efforts to rehabilitate, modernize,
and expand its electricity distribution system in Maranhão, one of Brazil’s
poorest states, where investments are much needed for rural electrification.
The loan will allow CEMAR to meet demand to expand its service in rural
areas, improve the quality of service to end consumers, and reduce losses
while strengthening system reliability and quality. IFC’s financing consists
of an eight-year, $80 million equivalent reais-linked loan for its own
Leonardo Duarte Dias, CFO of CEMAR, said, “We are committed to expanding
access to electricity to the people in our concession area, while improving
our quality standards. The IFC loan will help us reach our goals.” The
proceeds will finance part of the investments made in 2007 and part of
those to be implemented in 2008 and 2009. CEMAR is expected to invest in
the range of $235 to $265 million in the two-year period.
Andrew Gunther, IFC General Manager for Brazil, praised CEMAR’s “light
for all” program. He said, “CEMAR’s implementation of Programa Luz
para Todos aims to provide universal electricity access in one of Brazil’s
poorest states, making the company a strategic partner for IFC. We seek
to partner with companies that generate significant development impact,
and CEMAR is clearly doing this.”
This is IFC’s first reais-linked loan for Brazil’s power sector and its
first local currency loan disbursement to a nonfinancial sector company
in the country.
“IFC’s local currency financing to CEMAR using the Brazilian real/U.S.
dollar swap market will have an important demonstration effect. Local currency
financing will help the company minimize its exposure to foreign currency
and match the currency of its revenues with that of its funding,” said
Shanker Krishnan, IFC Deputy Treasurer.
“This loan is the first CEMAR has obtained in the international financial
market, and it demonstrates the company’s improved credit profile. Such
a strong credit profile has allowed CEMAR to raise funds with an attractive
maturity and all-in cost,” said Gisomar Marinho, Finance Manager of CEMAR.
IFC, a member of the World Bank Group, fosters sustainable economic growth
in developing countries by financing private sector investment, mobilizing
private capital in local and international financial markets, and providing
advisory and risk mitigation services to businesses and governments. IFC’s
vision is that poor people should have the opportunity to escape poverty
and improve their lives. In FY07, IFC committed $8.2 billion and mobilized
an additional $3.9 billion through syndications and structured finance
for 299 investments in 69 developing countries. IFC also provided advisory
services in 97 countries. For more information, visit www.ifc.org.
About Companhia Energética do Maranhão
CEMAR is the electricity distribution company operating in the state of
Maranhão in northeast Brazil. It serves 1.4 million customers in a 333,000
square kilometer concession area. Maranhão, with a population of 6.2 million,
is one of the poorest states in Brazil. CEMAR is majority owned by Equatorial
Energia, a publicly listed holding company that is indirectly controlled
by PCP Latin America Power Fund, a fund managed by UBS Pactual. As of December
31, 2007, CEMAR had $505 million reais in equity and $1.9 billion reais
in total assets. For more information, visit www.cemar-ma.com.br.