GE's Alstom unit to regain Brazil local-content status, says BNDES

Brazil's National Development Bank (BNDES) said wind turbine maker Alstom – now a unit of GE – will regain its local content accreditation in March when a six-month suspension period expires.

Rechargeexclusively revealed the suspension of the Brazilian unit from the list of manufacturers eligible for cheap financing from the BNDES, which has now given its reason for the sanction.

“Alstom didn't lose its accreditation because it didn't develop the supply chain to meet the local content requirements, it lost it because one of its delivered machines did not meet the local content requirements, so it was punished,” Guilherme Gandra, head of the BNDES local content scheme Finame told Recharge.

Gandra said that the same punishment will be applied to any machine or component financed by the BNDES that does not the meet the requirement. While suspended, turbine makers cannot close supply deals with financing from the BNDES.

Alstom, which has an ECO 122 platform nacelle assembly plant and two tower factories in the country, was suspended for six months in October. Although GE, which now controls Alstom's onshore wind business in Brazil, had told Recharge it was working to reinstate the ECO 122 in the BNDES programme, the suspension raised eyebrows in the market.

Gandra went on to explain that the Alstom operation and another three manufacturers – GE itself, Enercon and Vestas, which is officially opening its local plant today – have been investing to develop a local supply chain and will obtain final accreditation in the coming weeks, joining WEG, Gamesa and Acciona, which already hold the final accreditation as the three-year programme concludes this month.

“We are carrying out visits to the factories and checking documents that prove that the local content programme has been fulfilled. It is a complex process that takes between sixty to ninety days,” he said.

Since 2013, turbine makers have been investing in local nacelle, hub and tower assembly plants in the country to meet the requirements.

Roughly every six months manufacturers had to move up a notch in local content to reach what is now equivalent to around 70% of a turbine's components, following a localisation plan presented by the bank at the start of the initiative.

“The local content programme is very good and BNDES is on top of things, showing it is serious about it when it suspends the accreditation of company that has an important market share,” says Roberto Veiga, head of the wind power committee of the Brazilian Association of Machines and Equipment Manufacturers (Abimaq).

Veiga explained that the punishment is important for component suppliers and machine makers who invested in adequate production lines and supply chain respectively.

After the completion of the programme, all new entrants in the Brazilian market will need to meet the full requirements if they are to access financing to sell their machines in the 2GW a year Brazilian market.