Brazil May Invest $3 Billion in Energy Efficiency as Loans Rise
Brazilian businesses may invest as much as $3 billion in energy-efficiency measures through 2020 as banks become more comfortable offering loans that will be repaid mainly through cost savings, according to the International Finance Corp.
Energy-service companies, which provide consulting and power audits, may spend as much as $400 million next year on systems that help corporate clients reduce their power consumption, Daniel Shepherd, program manager for advisory services in Latin America and the Caribbean for the Washington, DC-based IFC, said in a telephone interview.
Most of the countryís 80 or so energy-service companies "arenít considered credit-worthy by financing institutions," he said in an interview. Financing rates as high as 18 percent in Brazil have deterred industrial companies from taking on such projects on their own, he said.
The national development bank Banco Nacional de Desenvolvimento Economico e Social is also offering an energy- efficiency credit line, Proesco, with annual rates of 14 percent. The IFC, a unit of the World Bank, is helping energy- service companies develop 12 pilot projects at hotels throughout the country in preparation for the 2014 soccer World Cup and the 2016 Olympic Games, Shepherd said. Most measures to save electricity are implemented by utilities that are required to dedicate 0.5 percent of their income to energy-efficiency projects or research, Shepherd said. Businesses in fast growing markets like Brazil typically allocate capital to their core operations, whatever they are, rather than invest in unrelated projects such as energy efficiency, Tom Rowlands-Rees, an analyst at Bloomberg New Energy Financeís London, UK office, said yesterday in a telephone interview.