Brazil's BNDES says wind financing to rise again in 2015, By Alexandre Spatuzza, Recharge News, January 20 2015

BNDES

Brazil's National Development Bank (BNDES) said new financing of greenfield wind farm projects will rise again this year, following an 83% increase in loan approvals in 2014

“There are many projects that have received preliminary approval and that are concluding the paperwork this year,” said Ana Raquel Paiva, manager of the alternative energy department at the bank.

Projections for an increase in financing this year are based on a backlog of projects contracted in auctions in 2013 and 2014, she said, while declining to give details.

“We can say that financing will rise, but not as much as last year.”

In December, BNDES approved R$1.7bn ($647m) in financing for 22 wind power projects with a total capacity of 590.4MW in four states. A total of 316 turbines will be installed at the wind farms, which will need to start operations by 2015.

BNDES, Brazil's main source of long-term financing for energy projects, approved a total of R$6.6bn in 2014 for wind farms with a combined installed capacity of 2.59GW.

This compares with R$3.6bn approved in 2013.

The increase in financing in 2014 came as a result of continued growth of greenfield projects contracted at auctions. In 2013, for example, Brazil contracted 4.7GW of new wind and in 2014 another 2.3GW.

Just over 15GW of wind has been contracted historically in Brazil. BNDES has financed 7.3GW since 2003, a total of R$20bn in loans.

The BNDES finances on average 60% to 65% of projects' value at below market rates, including the acquisition of turbines that meet its complex national-content requirements.

Paiva said that financing rules for projects contracted in 2013 and 2014 won't change, but that the bank still has to announce new financing rules for projects that are expected to be contracted in 2015.

Although she declined to comment, the federal government – which controls the bank – is considering changes in financing conditions such as higher interest rates.

The measures are part of fiscal control efforts to reduce the federal government's budget deficit.