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UPDATE 1-Brazil's BNDES to hike electricity industry lending this year -executive
September 8, 2017 / 9:12 PM / 3 months ago

UPDATE 1-Brazil's BNDES to hike electricity industry lending this year -executive

(Adds detail on lending rates)

SAO PAULO, Sept 8 (Reuters) - Brazil’s BNDES is likely to lend about 14.1 billion reais ($4.56 billion) to the electricity industry this year, well above the 9.2 billion reais disbursed to the sector in 2016, an executive at the state development bank told Reuters on Friday.

Carla Primavera, BNDES’ superintendent for the electricity sector, said the bank had disbursed about 6.3 billion reais in the first half of the year to the industry, with a focus on wind farms.

The projection comes after Brazil’s Congress created market-based benchmark lending rate for BNDES, in a bid to reduce government subsidies for loans.

The new rate hews more closely to the Brazilian Treasury’s borrowing costs, compared to the prior BNDES system which tied loans to a long-term interest rate that benefited the borrower but was more costly for the bank.

“Obviously the approval of the (new rate) forces the bank to focus more on its role and defining its operational policies,” Primavera said, adding that the shift would not mean less investment in the electricity sector.

“We don’t expect a decrease, especially in the renewables sector. That is not under discussion. It is a priority and it always was.” ($1 = 3.0912 reais) (Reporting by Luciano Costa; Editing by Andrew Hay and Cynthia Osterman)

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