BNDES weighs solar funding options

Brazil's National Development Bank (BNDES) has yet to decide local content rules and financing for 11GW of solar PV generation projects shortlisted for two upcoming auctions.

A BNDES spokesman says financing could be a mix of the bank’s own money, plus funds from the Inova Energia energy sector innovation program and Brazil’s R$560m ($245m) National Climate Fund.

While details are being finalized, he says the projects will be able to combine the different financing options.

Local developers say a solar project in Brazil requires at least $2m per installed MW. This translates to $4bn as government officials forecast at least 2GW of new solar installations through 2019. `

The auctions are 30 September (A-5) and 31 October (reserve auction).

The Climate Fund is managed by Brazil’s Environment Ministry and BNDES. The PV financing should follow the fund's general rules for a 15-year loan.

The criteria include financing up to 90% of projects that have a minimum project value of R$3m; annual interest rates between 3% to 6% (compared to around 10% market rates), and a grace period of six months after the start of commercial operation.

Inova Energia includes financing for renewables, smart grid and vehicle efficiency. The program is co-managed by BNDES, Brazil's innovation agency, Finep, power regulator Aneel and the Science and Technology Ministry.

So far this year, Inova Energia has made R$3bn in financing available – some of it for solar PV equipment.

BNDES is also considering buying equity in projects, as it does with some wind power projects.

Meanwhile, local content requirements may start with national manufacturing of solar modules and frames and by 2020, possibly include individual cells and wafers.