The President of the Inter-American Development Bank, Luis Alberto Moreno, and representatives of two private companies in Brazil and participant banks today signed loans and guarantees for $216.9 million dollars in financing for Centrais Elétricas do Pará S.A. (CELPA) and a $114.5 million dollar financing to Centrais Elétricas Matogrossenses S.A. (CEMAT) to support the expansion and upgrading of their electricity distribution systems.
The CELPA and CEMAT documents were signed by the company’s Chief Executive Officer Evandro Cesar Camillo Coura, Chief Financial Officer Carmen Campos Pereira, and Counsel Alexei Marcorin Vivan. On behalf of participant banks, officers signing were Banco Itaú Europa, S.A. Representative Jorge Bedran Jettar, and Société Générale Director Daniel Mallo.
Both firms were created as state-owned companies to supply electricity to Pará and Mato Grosso and later privatized in the late 1990s through a public bidding process won by Grupo Rede. These companies are presently among Rede’s largest concessionaries with a 30-year renewable concession granted at the time of privatization.
Grupo Rede is one of the largest private companies operating in Brazil’s energy sector for generation, distribution and trade of electricity and its distribution companies cover approximately 30 per cent of the country’s territory. Rede currently supplies electricity to around 2.7 million connections in the states of Pará, Tocantins, Mato Grosso, São Paulo, Minas Gerais and Paraná. It is completely owned by Brazilian capital.
Centrais Elétricas do Pará S.A.
The IDB loan will help finance CELPA’s 2005-2007 investment program for capital expenditures of $593.3 million dollars that will allow the company to provide electricity to new customers in rural and urban areas, achieve productivity gains and reduce costs and improve the quality and reliability of its distribution network system.
CELPA distributes electricity to the entire state of Pará and 50 per cent of its 1,287,000 residential customers are low-income consumers. Its new program will target additional rural low-income populations. The population of the state is 6.7 million.
The project will reduce the risk of energy shortages and interruptions in the system, increase electricity coverage, and improve living standards of the population.
The IDB financing includes an “A-loan” of up to $75 million dollars from the Bank’s ordinary capital and a syndicated loan, the “B-loan”, of up to $141.9 million dollars, consisting of resources from financial institutions that subscribe participation agreements with the IDB.
Centrais Elétricas Matogrossenses S.A.
CEMAT is an electricity generation and distribution company that serves the state of Mato Grosso that has a population of 2.7 million inhabitants. It currently serves 772.890 clients.
The company has a 2005-2007 investment program of $316.8 million dollars to expand and modernize its electrical network and business management support systems. It will expand its high-voltage distribution lines, rural and urban electrification, renovate the distribution lines and improve the distribution system quality.
The IDB financing includes an “A-loan” of up to $75 million dollars from the Bank’s ordinary capital and a syndicated loan, the “B-loan”, of up to $39.5 million dollars from financial institutions that subscribe participation agreements with the IDB.