BNDES concerned about Alto Sertao III loan - report

Brazilian wind farm. Author: Carla Wosniak. License: Creative Commons, Attribution 2.0 Generic

June 25 (Renewables Now) - The Brazilian Development Bank (BNDES) is concerned about the roughly BRL-1-billion (USD 261m/EUR 229m) loan it extended to the 743-MW Alto Sertao III wind complex due to the uncertainty surrounding the planned sale of the project and its existing off-take contracts, Reuters reports.

The particular project won a contract for the output of its Phase A in a reserve auction held in 2013 and was supposed to be completed in 2015. Because of insufficient resources, developer Renova Energia SA (BVMF:RNEW11) froze the Phase A project in 2016 at 87% completion.

Now, Brazilian energy firm AES Tiete Energia SA is looking to acquire the wind asset plus a 1.1-GW wind project pipeline from Renova, but recently regulatory agency Aneel rejected the transfer of Alto Sertao III's 305-MW Phase B. Aneel's decision did not concern the 438-MW Phase A.

BNDES has expressed concern in a letter to the regulator, noting that the bridge loan extended to the project developer will expire on July 15, Reuters said on Monday. The bank is worried that if the pending sale is not wrapped up this could lead to a loss of the investment and of the credit satisfaction of the BNDES and private lenders.

At this point it is unclear whether the project will keep its existing off-take contracts. The agreement that is already in place includes the option to amend the contract in case of a delay of more than two years. That deadline expired in August 2017, the report says.

(BRL 1 = USD 0.26/EUR 0.23)

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Lucas is based in Brazil. He joined Renewables Now to expand coverage of the Ibero-American market, a highly attractive destination for green energy investment.

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