Press Releases

IFC Supports Investment Plan of Brazilian Electricity Distribution Company in the State of Maranhão

Karina Manasseh
Phone: (55 11) 5185-6881

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 account.

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.

About IFC

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

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