By Lise Alves, Senior Contributing Reporter
SÃO PAULO, BRAZIL – Brazil’s Social and Economic Bank (BNDES) announced on Monday (October 3rd) its plan to expand the financial institution’s support for solar projects, increasing financing from seventy percent to up to eighty percent, those items eligible to obtain Long Term Interest Rate (TJLP), currently at 7.5 percent per year.
“It is a sector that we believe will grow significantly because these are high visibility projects, that have the means if financed in this way, to pay off in a relatively short time, and represent, to the cities and municipalities, a huge economy. Furthermore, they have a great social impact,” Marilene Ramos, Director of Infrastructure and Sustainability at the BNDES, was quoted by Agencia Brasil as saying.
The institution also stated it would maintain a high participation (up to seventy percent in TJLP) in other alternative energy sources such as wind, small hydro, biomass and cogeneration. Investments by the BNDES in large hydropower plants (which currently can obtain up to seventy percent financing) will be restricted to only fifty percent and the entity also announced it would no longer finance thermal plants run on coal and oil.
According to Ramos, the prioritization of solar energy is due to the fact that this technology is in its development stage in Brazil and needs to be consolidated. City projects, which include efficient public lighting such as switching street lighting from normal to LED bulbs, will also be financed up to eighty percent.
“Better-illuminated cities are safer and allow for nighttime leisure activities in addition to leading to the installation of a production chain for all of the equipment (to be used),” concluded Ramos.