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Brazil announces new energy plan worth over 50 bln USD

Xinhua, August 12, 2015 Adjust font size:

Brazilian President Dilma Rousseff launched on Tuesday a 186-billion-real (53 billion U.S. dollars) Investment Program in Electric Energy (PIEE) to expand the country's power grid.

The program will include projects to ensure Brazil can generate electricity at competitive prices at the international market, while increasing the role of clean and renewable energy sources in the grid.

At a ceremony held in Brasilia, Rousseff admitted that electricity bills had been rising in recent months despite her pledge to reduce them.

She said the rise was due to a lack of water in the reservoirs feeding hydroelectric power plants, and an ongoing drought since the middle of last year.

In the new plan, the government will seek to provide, through tenders, 116 billion reals (33 billion U.S. dollars) for energy generation and 70 million reals (20 million U.S. dollars) for transmission lines.

With two phases of investment set to happen before and after 2018, the ultimate goal of the PIEE is to add between 25,000 and 31,500 MW to the Brazilian grid.

It also seeks to draw on renewable sources, excluding hydroelectricity, to add between 10,000 and 14,000 MW, or around half of the total target.

In addition, tenders will happen before 2018 regarding the construction of 37,600 km of new power lines.

Brazil's economy has been continuously slumping over the past five years. The exports of Brazil's two largest companies, state oil company Petrobras and mining giant Vale, fell to their lowest level in a decade during the first half of the year.

According to the Ministry of Development, Industry and Foreign Trade, Petrobras and Vale's total foreign trade between January and June made up 11.04 percent of Brazil's total exports in that period, down from 15.62 percent the two companies accounted for in 2014.

Also on Tuesday, credit rating agency Moody's announced its decision to downgrade Brazil's government bond rating from Baa2 to Baa3, saying it was motivated by a combination of factors, including the Brazilian economy's "weaker-than-expected performance" and the lack of political consensus on fiscal reforms. Endi