Brazilian LNG-to-power project gets $288 million loan from International Finance Corp.
Energize Weekly, April 10, 2019
A Brazilian liquefied natural gas (LNG) power plant project, developed by an international joint venture, has received a $288 million loan from the International Finance Corporation (IFC), a sister organization to the World Bank.
The 15-year loan will cover development and operation of the plant in the state of Rio de Janeiro by Geração de Energia (GNA). The project will include a 1.3 gigawatt combined-cycle natural gas turbine, an LNG import terminal, a new transmission line and the expansion of an existing substation.
The project, the largest LNG-to-power complex in Latin America, is expected to start commercial operations in 2021 and will be linked to the country’s national power grid, the National Interconnection System.
The project is being developed by GNA, which is a Prumo Logística, BP and Siemens joint venture focused on sustainable energy and gas projects.
“A sustainable energy matrix, resilient throughout seasonal variations, is critical for Brazil’s long-term competitiveness and economic growth,” Lance Crist, senior manager in IFC’s infrastructure department, said in a statement. “IFC views LNG-to-power as a global strategic priority in supporting countries to access and integrate with global energy markets, while reducing carbon intensity of power grids, and favoring further penetration of renewable energy.”
IFC has already backed two other LNG-to-power projects: the AES Cólon complex in Panama, and a plant in Port of Sergipe, Brazil by Centrais Elétricas de Sergipe S.A.
The agency, a member of the World Bank Group, is the largest global development institution focused on the private sector in emerging markets. IFC said it is working with more than 2,000 businesses worldw
It is estimated that the GNA plant will displace coal and other carbon-intensive thermal power plants, reducing Brazil’s carbon footprint by an estimated 139 thousand tons of CO2-equivalent emissions annually.
Hydropower plants make up about 70 percent of Brazil’s installed generating capacity. Severe droughts in recent years have underscored the need for a more flexible and reliable mix of energy generation sources, ICF said.
The plant and terminal will also be a first step in creating the first fully integrated private natural gas hub in Brazil, one of only a few in Latin America. The development of such a hub is critical for increasing the competitiveness of Brazil’s natural gas sector, which has recently been opened to private sector investment, IFC said.
In addition to IFC’s US$288 million local currency loan, the financing package of GNA includes $475 million loan, local currency, from the Brazilian Development Bank.