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The project aims at the renewal and expansion of the promoter's distribution networks, reducing energy losses and enhancing the reliability and quality of electricity supply in the states of Sao Paulo and part of Mato Grosso do Sul. The project will connect some 116 000 customers to the network, of which over 39 000 are low income.
The project complies with the External mandate as it supports economic infrastructure, social inclusion and poverty alleviation, while supporting EU presence in Latin America through the transfer of know-how.
If located in the EU, the project would fall under Annex II of Directive 85/337/EEC and its amendments, requiring the component authority to determine whether an EIA is required. Normally ElAs would not be expected given the focus on medium and low voltage networks, whose impacts are related to visual nuisance, vegetation clearance and disturbances during construction. The local environmental assessment rules, biodiversity and social impacts have been assessed during appraisal and the promoter's capacity to address them is good.
The Bank will require the promoter to ensure that implementation of the project will be done in compliance with the Bank's Guide to Procurement.
This operation is covered by the EU Political Risk Guarantee for EIB loans outside the EU.