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Brazil Stops Authorizing Loans for Foreign Wind Companies

BNDES, Brazil’s state development bank, stopped authorizing loans for purchases of wind turbines produced domestically by international companies that the lender said aren’t meeting local-content requirements.

BNDES is auditing five turbine manufacturers and will decide this week whether they no longer qualify for loans that developers use to purchase the gear for wind farms, according to the wind-energy trade group Associacao Brasileira de Energia Eolica.

International turbine companies have built factories in Brazil to meet surging demand. The plants must get 40 percent of their components from within Brazil to qualify for BNDES financing, and cutting off loans will threaten developers that have already placed orders, Elbia Melo, executive president of Sao Paulo-based Abeeolica, said today in a telephone interview.

“The only place to get a loan for wind farms is BNDES,” she said. “This could jeopardize the development of projects.”

BNDES, formally Banco Nacional de Desenvolvimento e Social, has temporarily suspended loans for turbines from India’s Suzlon Energy Ltd., Denmark’s Vestas Wind Systems A/S, Germany’s Fuhrlaender AG, Clipper Windpower Ltd. of the U.S and Spain’s Acciona SA, Melo said. It will decide this week whether to make the ban official.

Rapid Growth

There are seven turbine factories in operation in Brazil, up from two in 2008, she said. Wind farms with more than 6,000 megawatts of capacity have been awarded contracts to sell power in government-organized auctions since 2009.

“The industry has grown so quickly over the last three years,” she said. “Suppliers have had little time to find local providers of components.”

BNDES is “seeking a solution that allows for the continued support of projects, but at the same time favoring manufacturers that meet the local-content requirements established by the bank,” according to an e-mail today from an official who didn’t want to be identified, citing the lender’s policy. The local-content requirement eventually increases to 60 percent.

Vestas, which was was judged in 2010 to be meeting BNDES’s local-content rules, has asked the lender why it’s no longer considered compliant and how it can regain the designation, Maria Jose Vazquez, senior manager for communication and branding at Vestas, said today in an e-mail.

The company, based in Aarhus, Denmark, built a factory last year in the northeastern city of Fortaleza that is set to go into full production by the end of this year, Vazquez said.

Suzlon, Clipper, Fuhrlaender and Acciona didn’t immediately reply to e-mails seeking comment.

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