BNDES financing the key as Brazil’s Pirapora beats PV go-slow

By on January 24, 2018

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The first stage of the 390MW showpiece solar plant shows the ability of BNDES to help projects get built, says one of its key suppliers. 

By Alexandre Spatuzza in Sao Paulo | 24 January 2018

As the first stage of the 390MW Pirapora solar plants is commissioned, Nelson Falcão, the head of NEXTracker in Brazil – which supplied the tracking devices – concludes that financing in local currency, and more specifically, from the National Development Bank (BNDES) was essential for the success of the project, as it will be for the expansion of solar PV in Brazil.

“Good financing conditions are more important than any tax incentives we can receive, so it’s important to have competitive financing from the BNDES,” he told Recharge.

Pirapora, located in the Southeastern state of Minas Gerais, is one of the biggest PV complexes in Brazil, and the start-up of the 190MW first phase helped Brazil top 1GW of solar capacity last year.

It was also the first solar PV project to have financing approved by the BNDES in a sector deeply affected by the fallout of the country’s political and economic troubles since 2015. Of the almost 3GW of solar capacity tendered in 2014 and 2015, around a third has been cancelled or handed back to the government at a decontracting tender last year.

At the time of the first tender, excitement about PV in Brazil could almost be felt in the air. The government was clearly signalling regular annual contracting, hoping to attract investors and panel makers to Brazil. Aside from Canadian Solar, China’s BYD also set up a plant here, but the BNDES was saying up to 10 module makers were considering the possibility of an assembly plant in the country.

But as Brazil’s troubles deepened, plans kept on being postponed. The coup de grâce for a nascent supply chain was the fast weakening of the real, which, at R$2.4 to the US dollar in 2014 when the first solar PV projects were contracted, plunged to R$3.2 to the US dollar today, after having come close to R$4 to $1.

But the Pirapora project ploughed on. “At the beginning, the original developers, Solatio [from Spain] sold the control of the project to France’s EDF Energies Nouvelles, a group which is in Brazil for the long term and has experience in the country since the 1990s, when it bought a power company in the privatizations of the time,” said Falcão.

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