Brazilian distributors set for US$2.9bn bailout

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Tuesday, July 22, 2014

Brazil's drought-stricken distributors are set to receive a second multibillion-dollar bailout in less than four months, the government announced on Tuesday.

The proposed 6.5bn-real (US$2.9bn) compensation package follows an initial 11.2bn-real payout in April.

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According to state news service Agência Brasil, national power regulator Aneel is in talks with local development bank BNDES and other lenders to finalize loan terms.

The announcement comes as distributors rely on spot market purchases from thermopower plants to make up for dwindling hydroelectric output.

Analysts say thermoelectricity costs up to six times more than hydropower, which accounts for more than 75% of Brazil's installed capacity.

BNamericas will host its fourth LatAm Power Generation Summit in Santiago, Chile, on August 13-14. Click here to download the agenda.