GNA contracts R $ 1.76 billion with BNDES Materials and Products

Natural Gas Açu (GNA), a joint venture formed by Prumo Logística, BP and Siemens, took an important step in the plan to install a thermal park to generate electricity in the Açu Port, northeast coast of Rio de Janeiro. Yesterday, a special purpose company (SPE) controlled by GNA, UTE GNA I Geração de Energia SA, signed a financing agreement of R $ 1.76 billion with the National Bank for Economic and Social Development (BNDES) for the implementation in the Açu from a thermal to natural gas with capacity of 1.3 gigawatt (GW). Part of the funds will go towards the construction of an import and regasification terminal for liquefied natural gas (LNG) in the port itself.

The BNDES loan to GNA represents almost 40% of the total investment in the UTE GNA I project, of R $ 4.5 billion. The unit is expected to start operating commercially in January 2021. GNA has another project, GNA II, also in Açu, with generation capacity of 1.7 GW and expected to start operating in 2023. Together, the two units will guarantee a generating plant of 3 GW of firm energy. Bernardo Perseke, president of GNA, said the venture is part of the "largest natural gas thermoelectric complex in Latin America." He said that the partners of the company structure the way to finance the project of the GNA II plant.

BNDES infrastructure and governance director, Marcos Ferrari, said that the financing operation with GNA I involves unprecedented factors for the bank. This is the first time BNDES finances LNG-fueled thermal. When the plant is operational, the gas vessels will dock at the Açu LNG terminal and the net cargo will be regasified to power the GNA thermoelectric plant. The terminal will have the capacity to move 42 million cubic meters of gas per day.

Ferrari also pointed out that the GNA transaction is structured according to which the BNDES enters with the credit and the German bank KfW guarantees the risk of the operation via bank guarantee throughout the amortization cycle of the financing, which is 14 years. Ferrari said that the GNA modeling will serve as a basis for other similar operations in the future, involving partnerships with institutions in infrastructure projects. Under the agreement with KfW, it is the responsibility of the German bank to take the risk of the transaction, which involves the eventuality of default.

The report tried but could not contact KfW. Representatives of the German bank were yesterday at the BNDES headquarters in Rio for the signing of the financing agreement with GNA. It was a private ceremony attended by the president of the BNDES, Dyogo de Oliveira, and executives linked to the shareholders of GNA: Prumo, BP and Siemens.

BNDES energy area superintendent Carla Primavera said that financing for the GNA I TPP is an important operation for the two development banks (BNDES and KfW). Carla said that in addition to adding more than 1.3 GW to the electrical system, thermal insures more energy security since it is installed in the submarket of the Southeast region of the country.

"In an [rainfall] environment, the thermal contributes to energy security," Carla said. She stated that, from the bank's total financing to the project, approximately R $ 1.4 billion corresponds to the construction of the thermal and R $ 330 million to the bank's share in the LNG terminal deployment. There is also R $ 53 million of financing for transmission line investment.

Carla said the transaction also represents an innovation in BNDES 'relationship with KfW. The Brazilian development bank has already made funding with the German institution in the past, but it is the first time that KfW offers a guarantee for a BNDES project financing. The first disbursement of funds for the GNA I UTE is expected to occur in the first quarter of 2019. Carla stated that the disbursement is in accordance with the physical and financial progress of the project. According to information from GNA, in the construction phase of the two thermoelectric plants will generate 4.5 thousand direct jobs and about 10,000 indirect. GNA's businesses currently employ more than 1,700 workers, 70% of Campos dos Goytacazes and São João da Barra, where Açu is located, a port that arose at the hands of businessman Eike Batista and is controlled by the American EIG.