Washington D.C., January 10, 2006—The
International Finance Corporation, the private sector arm of the World
Bank Group, will make an equity investment of $5.5 million in Energias
Renováveis do Brasil Ltda (Enerbrasil), to support the construction, operation,
and maintenance of a 49.3 megawatt wind power park located in the Municipality
of Rio do Fogo, State of Rio Grande do Norte, in the Northeast of Brazil.
Wind power is a free and renewable energy resource that offers substantial
environmental benefits with no pollution to many parts of Brazil where
it is difficult to transmit traditional power.
Scheduled to begin operating in June 2006, the Rio do Fogo wind farm is
expected to be the first large-scale wind power project to enter commercial
operation in Brazil. Enerbrasil will sell all its output to Centrais
Elétricas Brasileiras S.A. (Eletrobrás), Brazil’s state-controlled electricity
utility, under a 20-year power purchase agreement.
“We are very pleased to be partnering with Iberdrola in this investment.
IFC’s financing to Enerbrasil fits our strategy to support infrastructure
and to promote renewable energy development, which is a priority area for
the Government of Brazil,” said Atul Mehta, IFC’s Director for Latin
America and Caribbean.
Brazil has been a leading country in the use of renewable energy resources,
including hydroelectricity and alcohol-based vehicle fuels. In 2002,
to expand on the available resource potential, Brazil passed a law to create
PROINFA, a national program designed to stimulate greater use of electricity
generated from non-traditional renewable energy resources such as wind,
biomass, and small hydro generation projects. PROINFA calls for a
total of 3,300 MW of such new capacity supported by firm power sales contracts
with Eletrobrás. The PROINFA program is administered by the Ministry
of Energy and Mines.
“IFC is committed to facilitating private sector investment in renewable
energy, including wind power generation systems. This project is an important
investment that will facilitate the development of Brazil’s PROINFA program,”
said Francisco Tourreilles, IFC’s Director for Infrastructure.
“Iberdrola is delighted to be working with IFC on this important renewable
energy project in Brazil. The Rio do Fogo wind farm is just one part
of the company’s plan to expand renewable energy projects in strategic
countries” said Bosco López-Aranguren, Iberdrola´s Head of Structured
Finance for Renewable Energy.
Enerbrasil is a wholly-owned Brazilian subsidiary of Iberdrola Energías
Renovables (“Iberenova”), one of the leading companies worldwide in the
renewable energy business. Iberenova is a 100% subsidiary of Iberdrola
S.A. of Spain, one of the largest private electricity groups worldwide.
Iberdrola is among the leading renewable energy utilities in the world
and has approximately 3,000 MW of wind projects under management.
IFC is pursuing wind project financing opportunities across Latin America
and the Caribbean as well as other developing regions, an effort that includes
addressing market barriers.
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.