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Bailout of power utilities will have participation of 19 banks

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Almost 20 banks will participate in the credit to the power sector that the Brazilian Development Bank (BNDES) arranged over the last two months. The loan gained practically final shape on Wednesday and will charge interbank rate CDI plus 2.9%.

Until Friday, each power distributor will need to inform the Brazilian Electricity Regulatory Agency (Aneel) whether it accepts the terms of the transaction, which grants 11 months of grace period and 54 months to amortize the loan, for a total of 65 months - a little more than five years. The funds are expected to be effectively cleared in the last days of July.

Nineteen lenders will form the consortium of banks assembled by BNDES, which consulted 30 institutions. They were willing to lend up to R$19.6 billion, but the cap defined by the Aneel for this operation is R$16.1 billion. Of the total, 30% will come from federal banks, especially BNDES and Banco do Brasil. The rest, 70%, will come from private-sector banks - including heavyweights and some foreign lenders that showed interest in participating, the BNDES director of privatizations, Leonardo Cabral, said.

"This credit operation reflects the big effort of the government, with the Aneel and the CCEE [Electric Energy Trading Chamber], to preserve the financial health of the distribution segment and the consumer interests," the executive secretary of the Mines and Energy Ministry, Marisete Pereira, told Valor.

She stressed the difference between the new loan and a similar transaction made in 2014, when the final cost was inflation index IPCA plus 9.6%. Now, with the lowest interest rate ever, it is IPCA plus 5%.

The covid-19 pandemic has sharply altered the situation of the power industry, with a drop of demand and a surge of non-payments. As measure to relieve consumers, the Aneel forbade cuts of electricity supply for 90 days because of missed bill payments. But this has impact on the companies' finances.

The...

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