Another important loan granted for regional energy integration

A loan of great importance for cross-border and regional energy integration was today granted to Brazil for the electricity interconnection project with Venezuela. The borrower is Centrais Elétricas Brasileiras SA (Eletrobas) and the execution agency is Eletronorte.

The loan for US$55 million – at ten years – will be used to build the interconnection of the Guri hydroelectric generation complex, in southeast Venezuela, with the electricity network of northern Brazil.

CAF is financing a 211-km section of the electricity transmission system – at 230 kv – which will optimize the electricity supply for the benefit of the inhabitants and industries located between the Venezuelan border town of Santa Elena de Uairén and Boa Vista, capital of Roraima state, Brazil.

The agreement was signed in Caracas by CAF President & CEO Enrique García, and senior directors of Electrobras, in the presence of the Venezuelan Minister of Border Affairs Pompeyo Márquez; governor of Roraima state Neudo Campos, and Brazilian ambassador in Venezuela, Clodoaldo Hugueney.

García said the project was important at continental level because it was a starting point for future energy interconnections between Latin American countries, undertaken with an global vision and better use of resources. In the specific case of Venezuela, the connection will open new markets for the sale of its power surplus and contribute to integration and border development, which will be generated by opening a new industrial and trade flow between neighboring countries.

The CAF chief said Brazil would benefit from installation of a reliable transmission system, which will meet the needs of industry and supply electricity to various localities in the region, raising the standard of living of its inhabitants and mitigating the isolation and physical separation which affect trade and productive activity.

Minister Pompeyo Márquez said, "this project has special importance for the electrification of the south of Bolívar state, which is part of Venezuela’s South Sustainable Development Program (PRODESSUR)." He added that the Macagua-Km 88-Santa Elena de Uairén section covers over 600 km in Venezuelan territory.

As in all projects financed by CAF, environmental and social variables are given special consideration, for which reason the funds granted include US$5.2 million to cover prevention or mitigation of environmental impacts. Also, in this specific case, the transmission line will be parallel to Highway BR-174 so the environmental impact is expected to be minimal.

This loan is the first tranche of a total of US$81 million approved by CAF for Brazil for energy integration with Venezuela, and the third long-term operation approved for this country since November 1995 when it became a shareholder of the Corporation, joining another 11 nations of Latin America and the Caribbean.

The other two loans granted to Brazil were used to finance the BR-174 Highway also on the border with Venezuela (US$86 million), and construction of the Bolivia/Brazil gas pipeline (US$215 million).