Brazil
News

BNDES disburses Eletropaulo's US$168mn CVA financing

Bnamericas Published: Saturday, June 05, 2004
Brazil's national development bank BNDES paid power distributor AES Eletropaulo 521 mn reais (US$168mn) on Thursday (June 3) as part of the CVA financing program, Eletropaulo announced Friday. The company now expects to obtain 240mn reais financing, also from BNDES, that is part of another emergency financing program that the bank made available, in 30 days, Eletropaulo CFO Andrea Ruschmann told reporters during a conference call. This would conclude outstanding financing that has already been arranged with the bank, Eletropaulo will use 312mn reais of the financing to pay down outstanding sector obligations and the remainder to pay creditors under the March 12 debt renegotiation agreement, the statement said. The financing disbursed this week is part of a BNDES program instituted by the federal government in November 2003 to anticipate the uncontrollable costs (CVA) element of the power rate adjustment, which was withheld for 12 months from April 2003 as an anti-inflation measure. The CVA includes, among other costs, foreign exchange rate variations. To tap BNDES's CVA financing program, companies had to restructure their debts. The electricity regulator Aneel withheld a 7.4% power rates increase in July 2003. Eletropaulo is controlled by US power company AES. It concluded a 2.3bn-real debt restructuring agreement with private creditors in March and last year signed a US$1.1bn-dollar debt-for-equity agreement with BNDES. Eletropaulo will pay back the financing to BNDES in 24 months with extra revenue seen from July onwards after Aneel grants this year's rates increase, which is expected to include half of the 7.4% that was withheld from the 2003 rates increase, Ruschmann said. The other half of the withheld adjustment is expected to be granted in July 2005, she said. "We are confident Aneel will grant us the CVA parcel because it has already done so in the rate revisions for other companies," she said. The cost of BNDES's financing is of one percentage point over the interbank lending rate, currently at 16%, a company spokesperson said.

Subscribe to the most trusted business intelligence platform in Latin America. Let us show you our solutions for Suppliers, Contractors, Operators, Government, Legal, Financial and Insurance.

Subscribe to Latin America’s most trusted business intelligence platform.

Other projects in: Electric Power (Brazil)

Get critical information about thousands of Electric Power projects in Latin America: what stages they're in, capex, related companies, contacts and more.

Other companies in: Electric Power (Brazil)

Get critical information about thousands of Electric Power companies in Latin America: their projects, contacts, shareholders, related news and more.

  • Company: Siemens Brasil
  • Siemens Ltda. (Siemens Brasil) is the Brazilian subsidiary of the German technology company Siemens A.G. Present in Brazil since 1867, the company's long-term growth fields are ...
  • Company: Alfa Laval Ltda.  (Alfa Laval Brasil)
  • Alfa Laval Ltda. (Brasil) is a subsidiary of Alfa Laval Corporate AB and is headquartered in São Paulo, Brazil. Established in 1959, the Brazilian branch has continued to expand...
  • Company: São Martinho S.A.  (São Martinho)
  • São Martinho S.A. is a Brazilian publicly-traded company focused on the planting of sugarcane and the subsequent production of sugar, ethanol (both anhydrous and hydrous) and ot...