(Adds BNDES comments, context)
By Marcelo Teixeira
SAO PAULO Oct 3 Brazil's BNDES, Latin America's
largest development bank, said on Monday it will no longer
finance coal-fired or oil-fired power plants in a push to
discourage carbon-intensive energy projects.
BNDES released a new set of guidelines for public financing
in the power sector. The bank decided to reduce credit to
gas-fired power plants to 50 percent of total investment from 70
percent. For solar developments, it increased financing to 80
percent of project values from 70 percent.
"The measures aim to contribute to increase alternative
energy sources in the Brazilian power mix, directing
investments to projects with high social and environmental
returns," the bank said in a statement.
Public financing for carbon-intensive projects such as
coal-fired power plants has long drawn the ire of environmental
groups across the globe, even more so now that most countries
have agreed to reduce carbon emissions to limit global warming.
Brazil has financed big coal projects in the past, including
a large 300-megawatt (MW) plant built by one of the companies
controlled by former billionaire Eike Batista.
BNDES also said on Monday it will finance up to 80 percent
of energy efficiency projects, such as cities switching to LED
Both solar and energy efficiency financing lines are based
on the so called TJLP interest rates, now at 7.5 percent per
year, much lower than the country's Selic basic rate of 14.25
percent per year.
BNDES said it wants to encourage the nascent solar energy
industry in Brazil by giving the sector better credit
Additionally, BNDES said it will reduce to 50 percent from
70 percent financing for large hydroelectric power plants.
While a renewable energy source, hydroelectric plants in
Brazil have faced severe criticism from environmentalists
because they are often built in the Amazon rainforest and have
severe impacts on the jungle's delicate ecosystem.
(Reporting by Marcelo Teixeira; Editing by Chizu Nomiyama and