The Brazilian Development Bank and Germany’s KfW bank signed a loan agreement to the tune of US$ 335 million. Resources, raised by the Brazilian bank, will be used to finance wind park projects to be implemented in Brazil by Brazilian companies.
The operation is the largest ever carried out by the German development bank in Brazil. The agreement was signed by the president of the BNDES, Mr. Luciano Coutinho, and Mr. Norbert Kloppenburg, a member of KfW’s advisory board.
The latest fundraising effort the BNDES carried out together with the German bank was in 2010, in the amount of US$ 68.4 million, and sought to provide support projects to implement small hydroelectric power plants in Brazil.
Another high point in relations between the two institutions is the KfW’s donation of equivalent to 21 million euros to the Amazon Fund. This fund is managed by the BNDES and provides support to non-reimbursable investments into efforts to prevent, monitor and combat deforestation, as well as fostering conservation and the sustainable use of forests in the Amazon Biome.
The new loan will help meet the growing demand in Brazil for financing for projects in power generation using alternative sources, as well as helping to diversify Brazil’s energy grid. With the new program, which includes a counter-investment of the same amount, expectations are to meet the energy demand of more than three million Brazilian consumers.
KfW is a financial group, of which 80% is controlled by the Federal Republic of Germany, and the remaining 20% is controlled by the states within that country. It was created in 1948 to finance projects aimed at reconstructing Germany’s post-war economy.
Since then, KfW has broadly diversified its activities and has financed investments outside Germany, with presence in more than 60 countries. Support for developing countries is carried out within the scope of Official Financial Cooperation fostered by Germany’s Ministry of Economic Cooperation and Development (BMZ).
The partnership between the BNDES and KfW began in the 1960s and has seen a total of 13 agreements signed, including today’s. The two institutions seek to further their partnership in the area of renewable energy. Besides financial resources, know-how and technology may also be exchanged in areas related to renewable energy.
This new loan agreement is within the scope of strategic cooperation between Brazil’s and Germany’s governments in the energy sector, in accordance with the accord both countries signed on May 14, 2008. On that occasion, a Cooperation Agreement for the Energy Sector was signed, focusing on Renewable Sources and Energy Efficiency.
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