Brazil to Raise Local-Content Rules for Wind, Trade Group Says

Banco Nacional de Desenvolvimento Economico e Social, Brazil’s development bank, plans to increase local-content requirements for wind-turbine companies as the nation seeks to boost business for domestic suppliers, a trade-group official said.

Turbine makers in Brazil will be required to get more than 60 percent of their components from domestic companies under a new, “qualitative” method of calculating local usage, according to Elbia Melo, executive president of the Sao Paulo-based trade association Associacao Brasileira de Energia Eolica. She didn’t say by how much the new rule will exceed the current requirement of 60 percent.

Wind energy is surging in Brazil and the government is taking steps to ensure that local manufacturers benefit from the expanding market, Melo said. BNDES, as the lender is known, stopped offering financing earlier this year for developers to buy turbines from five suppliers that didn’t meet local-content requirements.

“The 60 percent requirement wasn’t a sufficient incentive mechanism,” Melo said in an interview today. “The game is very clear now. Suppliers have to comply with the rules to stay in Brazil and remain competitive.”

The new rules will require companies to describe in detail which components they source in Brazil and under what time frame, she said. They will be issued before a government-organized energy auction scheduled for Dec. 14. Developers have registered projects with 14,181 megawatts of generating capacity for the event, about 84 percent from wind.

A press official for BNDES who didn’t want to be named because of agency policy wouldn’t comment on the new rules.

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