Impsa’s Brazil Bankruptcy Said to Delay $2 Billion Wind Parks

The bankruptcy of a turbine maker in Brazil is threatening to derail 5 billion reais ($2 billion) of wind parks being built by a unit of state-run power utility Eletrobras, said three people with direct knowledge of the matter.

The unit, Furnas, canceled at least 2 billion reais of turbine supply contracts after Wind Power Energia SA, the Brazilian arm of Industrias Metalurgicas Pescarmona SA, or Impsa, filed for bankruptcy protection late last year, said one of the people, who asked not to be named because the matter isn’t public. Furnas had also planned to buy Impsa turbines for additional projects, bringing the total to 5 billion reais.

That leaves Furnas and its partners in the parks, including J&F Investimentos SA and Banco BMG SA, with a tough choice: Either wait for another local supplier, which are already operating at full capacity, to take on the order or convince an international company to set up shop in Brazil to be eligible for cheap state financing. Either way, Furnas will incur losses with the projects because of delays, the person said.

A third option -- importing the turbines and forgoing the state loans -- was discarded because it would make the parks unprofitable, said the person.

“Impsa was an important turbine supplier in Brazil,” Antonio Tovar, head of the renewable energy department at national development bank BNDES, said in an interview on Jan. 12 in Rio de Janeiro. “Its bankruptcy has disrupted the market.”

Ismael Jadur, a spokesman for Impsa, didn’t respond to requests for comment made by e-mail and telephone.

China Shipbuilding

Furnas in an e-mailed response to questions confirmed that at least one of the parks is delayed and that it’s seeking turbines from manufacturers already operating in Brazil or willing to open a factory. J&F and BMG didn’t respond to requests for comment.

Furnas has had talks with state-owned China Shipbuilding Industry Co. to build a turbine factory in Brazil, according to the person familiar with the situation. Furnas has also asked Brazil’s energy regulator Aneel to extend the deadline for some parks to start operating, the person said.

Furnas, whose parent company is formally known as Centrais Eletricas Brasileiras SA, was awarded the contracts in 2013 to build and operate the parks in Rio Grande do Norte and Ceara states. If the parks, with planned capacity of 462 megawatts, aren’t operating this year, Furnas and its partners will be forced to meet some supply contracts by buying electricity on the spot market to resell to customers, probably at a loss.

The 2 billion-real order was insured, according to the person familiar with the matter. The total 5 billion-real investment was for eight parks with planned capacity 1.04 gigawatts.

As of September, Impsa had contracts to supply 1.5 gigawatts of turbines in Brazil, accounting for 12 percent of the market, making it the nation’s fourth-biggest supplier, according to Bloomberg New Energy Finance.

Before it's here, it's on the Bloomberg Terminal.