Wind sector 'unaffected' by Brazil austerity

Brazilian wind projects are not threatened by government plans to scale back treasury loans as part of a fiscal austerity drive, local industry association Abeeólica told BNamericas.

Abeeólica executive president Elbia Gannoum said she had received assurances from President Dilma Rousseff that financing for the sector will not be cut.

"The president told me face to face last week that the government cannot and will not reduce financial support for the wind sector," Gannoum said on the sidelines of the BNamericas 5th Latam Power Generation Summit in Lima.

"She said investors can rest assured that their projects will be unaffected. It shows the important role wind has in Brazil's energy plans."

Earlier this year credit ratings agency Fitch predicted Brazil's government-sponsored lender BNDES would reduce its overall loan commitment in 2015 as the government grapples with an escalating economic crisis.

Local media reported this week that the nation's treasury was analyzing all investment projects involving state or city governments along with multilateral organizations such as the World Bank.

BNDES has set aside 7.6bn reais (US$2.26bn) in credit lines for wind developers this year, up from 6.6bn reais in 2014, the bank's infrastructure director Roberto Zurli Machado said last week.

Meanwhile Gannoum said wind was likely to play a minor role in Brazil's A-3 auction for new generation projects on Friday.

"Given the current conditions we don't have high expectations," Gannoum said, citing higher interest rates and lower prices as reasons for reduced demand from developers.