Bank’s loan will allow CEEE-D to expand and modernize its electricity distribution system through a program called Pró-Energia RS Distribuição
The Inter-American Development Bank (IADB) has approved a $131 million loan to improve electricity distribution in Brazil’s Rio Grande do Sul State. The financing will be provided to Companhia Estadual de Distribuição de Energia Elétrica (CEEE-D), which distributes one-third of the energy consumed in the state.
In addition to the IDB loan, CEEE-D will provide $87 million, bringing the total investment in a program known as Pró-Energia RS Distribuição to $218 million.
According to data from the Brazilian National System Operator (ONS), the demand for electricity in the area served by CEEE-D increased approximately 3.2 percent annually in the recent years, a trend that is set to continue.
The project will help Rio Grande do Sul state expand and modernize its distribution system to meet a demand that is expected to peak during the 2014 World Cup as Porto Alegre, the state’s capital, is one of the hosting-cities. The resources will also be employed by CEEE-D to implement an information technology (IT) system supporting business management.
To address the region's needs, the Program Pró-Energia RS Distribuição involves the construction and expansion of substations, the upgrade of equipments used in these substations, the construction and expansion of sub-transmission lines, and the renewal of IT management and business systems.
“Electricity demand has been increasing due to the region’s economic growth, which is expected to peak during the 2014 World Cup, and investments in the electricity distribution system are critical to provide reliable and quality services,” said Sylvia Larrea, IDB’s project team-leader.
The loan has a 24-year term with a four-year grace period. The interest rate is variable and based on LIBOR.