Bioenergy Geradora de Energia Ltda., the Brazilian renewable-energy developer that’s going to sell the world’s cheapest wind energy, plans to issue as much as 250 million reais ($125.7 million) of inflation-linked bonds to finance power projects.
The company expects to find a new investor in the first half of the year to help build wind farms worth 1.2 billion reais and plans to sell debt soon after, according to Chief Executive Officer Sergio Marques.
Bioenergy is seeking to raise funds to develop 380 megawatts of wind farms. Most of the projects were awarded contracts to sell power at 87.77 reais a megawatt-hour in a government-organized auction in December, less than half what Germany offers wind developers, Eduardo Tabbush, an analyst at Bloomberg New Energy Finance, said today in a telephone interview.
“It’s going to be very challenging raising equity and debt for these projects,” Tabbush said. “These rates are the lowest we’ve seen in the world so far. Returns will be extremely tight.”
The bonds may be paid back over as many as 10 years and may carry interest rates two percentage points above IPCA, a Brazilian consumer-price index that’s now 5.84 percent, Marques said.
Bioenergy, the nation’s third-biggest seller of wind energy in auctions, hasn’t decided on a turbine supplier and is considering U.S., European and Chinese providers.
The company may seek to reduce construction costs by using Chinese turbines with financing from China Development Bank Corp., Tabbush said. The lender offers interest rates for turbines that are as much as 50 percent cheaper than South American banks.
Banco Nacional de Desenvolvimento Economico e Social, the Brazilian national development bank that offers loans for wind farms built with local components, offers 16-year loans with interest rates as low as 7.5 percent, Tabbush said.