The European Investment Bank (EIB) is providing EUR 90 million to expand and reinforce the electricity networks owned by EDP-Energias do Brasil S.A. (EDB) in the states of São Paulo and Espírito Santo. EIB Vice president, Carlos da Silva Costa, and EDB’s Chief Financial Officer, Miguel Días Amaro, signed the loan contract in Lisbon today.
In the signing ceremony, Vice president da Silva Costa pointed out that “the project is a good example of the common interest shared by the EU –and the EIB as its financial arm- and the Latin American region. In particular, this loan will contribute to the development of the areas concerned as it provides basic infrastructure to meet the growing demand for power. In addition, and, being EDB a subsidiary of Energias de Portugal, it will also support the presence of a European Union company in the Brazilian market. Both objectives lie in the spirit of EIB lending in Latin America”. EIB Vice president also highlighted “the social dimension of the investments as they will provide employment during construction and will improve power supply in areas where, together with the national Universalização programme(1), will benefit poorer population.”
The project concerns two years of EDB’s multi-annual investment programme 2008-2012. The programme’s purpose is to expand and reinforce the electricity distribution networks, to maintain and improve quality of supply and to reduce system losses in the company’s concession areas located in the states of São Paulo and Espiríto Santo, both in the southeast region of Brazil. The two states have a population of some 8 million inhabitants and EDB provides electricity to 2.7 million customers. Expansion and improvement investments will concern overhead distribution lines, underground cables, substations and other.
The EIB is extending this loan in the context of the current lending mandate for Asia and Latin America (ALA IV), covering the period 2007-2013. Under this mandate the EIB is authorised to lend up to EUR 3.8 billion for financing operations that contribute to climate change mitigation or to support the presence of the European Union (EU) in those regions through Foreign Direct Investment and the transfer of technology and know-how.
The European Investment Bank is the EU’s long-term financing institution promoting European objectives. Set up in 1958, the EIB operates in the 27 EU Member States and more than 130 other countries in Asia and Latin America, Central and Eastern Europe, the Balkans, the Mediterranean region, Africa, the Caribbean and the Pacific. Lending operations outside the EU are part of the EU co-operation policy with third countries.
Since 1993 the Bank has carried out four successive lending mandates for Asia and Latin America. The EUR 3.8 billion regional ceiling of the current mandate (ALA IV) is broken down into indicative sub-ceilings of EUR 2.8 billion for Latin America and EUR 1 billion for Asia.
(1) Universalização = Universalização da inclusão, that is “generalization of social inclusion through the access to energy”. This is a subsidized national programme run in collaboration with energy distributors, which allows for free energy for low-income customers and reduced tariffs for low-consumption customers.