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IDB approves up to $66 million in financing for Novatrans Energia S.A. transmission project in Brazil

The Inter-American Development Bank today announced the approval of up to $66 million in financing to Novatrans Energia S.A. to fund a 1,200-megawatt, 1,278-kilometer electricity  transmission line from the state of Maranhão to Brasilia.

By doubling the capacity of the existing North-South transmission link, the private sector project will increase the overall energy flow and improve system reliability, reduce energy shortages and interruptions, and generate fuel cost savings.

The project will follow right-of-way of the existing North-South interconnection line, sharing access for inspection, maintenance, and operation, thereby reducing environmental impact. It will connect the Imperatriz substation in the state of Maranhão with the Samambaia substation in the Federal District.

The IDB financing consists of an A-loan of up to $30 million from the IDB’s ordinary capital and B-loan of up to $36 million with funds provided by commercial banks or other financial institutions.

BNDES, the Brazilian national development bank, will provide a separate loan equivalent to approximately $133 million, and ABN, a private bank, will provide another loan equivalent to approximately $33 million. The total project cost is $338.1 million.

An important benefit of the project will be the increase of power flows between the southern and northern electrical regions, which have different climates and complementary seasonal hydropower capacity.

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