Energy Unplugged by Aurora
EP.172 Igor Fonseca, Head of Power, Project Finance, Santander
Dec 12, 2023
This week on Energy Unplugged, Igor Fonseca, Head of Power, Santander Brazil Project Finance, discusses project finance in Brazil's power sector. Topics include the impact of the shift to the free market and the green transition plan on project financing and investment in Brazil, key risks for Brazilian power projects, and the role of state-funded institutions in project support and financial discipline.
53:12
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Quick takeaways
- State lenders in Brazil's power sector often share risks with other institutions, and recent regulatory changes have reduced their dominance, encouraging more private funding.
- While low energy prices can affect project profitability in Brazil, factors like CAPEX reduction and interest rate fluctuations can counterbalance their impact, emphasizing the importance of considering the broader context and interplay of various factors.
Deep dives
The influence of state lenders in the Brazilian power sector is overrated
State lenders have played a dominant role in financing power projects in Brazil, but their influence is often exaggerated. While they have provided significant funding and support, private sector investment and international banks also contribute to the sector. The state lenders, such as BNDES, have leveraged subsidies and low-interest rates to attract private capital, but they often share the risk with other institutions. The role of state lenders is evolving, with recent regulatory changes reducing their dominance and encouraging more private funding.
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