Brazil Wind-Turbine Makers to Get BNDES Loans, Group Says

Four wind-turbine suppliers will re- qualify for cheap loans from Brazil’s development bank BNDES within three months as they start complying with local-content requirements.

Three of the companies will be eligible for low-cost loans within 40 days and a fourth within 90 days, Elbia Melo, executive president of Sao Paulo-based wind-industry trade group, Associacao Brasileira de Energia Eolica, said in a telephone interview.

Melo received the information from BNDES, which accused Vestas Wind Systems A/S (VWS), Suzlon Energy Ltd. (SUEL), Siemens AG (SIE), Acciona SA (ANA) and Fuhrlaender AG of not getting at least 40 percent of their parts from local suppliers following an audit in June. The bank didn’t identify to Melo which of the companies would regain financing.

“The important thing now is to recuperate loans for all these suppliers,” Melo said. Turbines bought without cheap BNDES debt “aren’t competitive in Brazil.”

Banco Nacional de Desenvolvimento Economico e Social, as the lender is officially known, offers loans based on the long- term lending rate TJLP that carries annual interest rates of 6.4 percent minus a risk spread levied by the bank that disburses the financing, Melo said in an e-mail today.

BNDES loans for equipment from suppliers that don’t meet local-content rules carry interest rates of about 9.7 percent, minus a risk spread, and are linked to inflation, she said.

A spokesman for BNDES who wanted to remain anonymous because of the bank’s media relations policy wouldn’t comment in response to a call from Bloomberg News.

“A one-percent rise from an interest rate point of view is very expensive,” when financing wind farms, according to Melo. Suppliers will have a “big problem” when selling equipment if they’re unable to meet the bank’s requirements.

To contact the reporter on this story: Stephan Nielsen in Sao Paulo at snielsen8@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net

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