Brazil government considers emergency Coronavirus loans for power sector
SAO PAULO -
Brazil’s government is considering an emergency loan package for energy distributors struggling with lower energy use and facing lost revenues because of the coronavirus outbreak, an industry group told Reuters.
Marcos Madureira, president of Brazilian energy distributors association Abradee, said the package being negotiated by companies and the government could involve loans from state development bank BNDES or a pool of banks, but that the value of the loans and other details was not yet settled.
Also, Brazil’s Mines and Energy Ministry is indefinitely postponing projects to auction off energy transmission and generation assets planned for this year because of the coronavirus, it said in the Official Gazette.
The coronavirus outbreak will also delay the privatization of state-owned utility Eletrobras, its chief executive officer said on Monday.
The potential loan package under discussion would resemble a similar measure in 2014 and 2015 that offered about 22 billion reais ($4.2 billion) in loans to the sector as Brazil was entering its deepest recession on record, Madureira said.
Public and private banks including BNDES, Caixa Economica Federal, Itau Unibanco and Banco Bradesco participated in those loans.
Three sources involved in the discussions said on condition of anonymity that the Mines and Energy Ministry and energy regulator Aneel were considering the matter.
Aneel declined to comment. The Mines and Energy Ministry and BNDES did not immediately respond to requests for comment.
Energy distributors worry that reduced electricity usage from the outbreak could result in deep revenue losses.
The coronavirus has led to widespread lockdowns of non-essential businesses in Brazil, while citizens are being told to stay home. That is causing lost income for many hourly and informal workers in Brazil, who could be unable to pay their electricity bills.
The government sees a loan package as a way to stave off a potential chain of defaults in the sector, one of the sources said.
On a conference call with investors about the company’s latest earnings, Eletrobras CEO Wilson Ferreira Jr. said privatization would be delayed, without giving any more details on the projected time scale.
The largest investors in Brazil’s energy distribution sector include Italy’s Enel, Spain’s Iberdrola via its subsidiary Neoenergia and China’s State Grid via CPFL Energia as well as local players Energisa e Equatorial Energia.
Related News
Here's what we know about the mistaken Pickering nuclear alert one week later
TORONTO - A number of questions still remain a week after an emergency alert was mistakenly sent out to people across Ontario warning of an unspecified incident at the Pickering Nuclear Generating Station.
The province’s solicitor general has stepped in and says an investigation into the incident should be completed fairly quickly.
However, the nuclear scare has still left residents on edge with tens of thousands of people ordering potassium iodide, or KI, pills that protect the body from radioactive elements in the days following the incident.
Here’s what we know and still don’t know about the mistaken Pickering nuclear plant alert:
Who sent…
