Macae

completed

Brazil has been experiencing an energy crisis resulting from several years of significant under-investment in new generation and transmission capacity and heavy reliance on hydropower. The project is an 870 MW "quasi" merchant natural gas-fired power plant. It is being developed under the Priority Thermal Power Program launched in 2000 by the government of Brazil. As such, the Macaé plant will help to underpin the government’s objective to more optimally balance Brazil’s sources of energy supply by increasing thermal generation capacity, thereby reducing the country''s reliance on hydropower. The project will provide reliable and flexible thermal power to the Southeast region of Brazil, one of the areas heavily impacted by the recent energy crisis. Due to the flexibility of the plant''s technology and fuel supply arrangements, the Macaé plant is one of the few thermal power plants in Brazil which is able to flexibly respond to the country''s power needs. The plant is located in a strategic location on the Brazilian electricity grid and, as such, will help to optimally regulate the operation of the electricity grid in the region. By supporting the development of the project, IFC will be providing strong support to the Brazilian power sector as the country seeks to emerge from the recent energy crisis. IFC''s support will help to ensure that the project is able to mobilize the large amount of commercial financing which is required for an investment of this size (B loan of up to $275 million). IFC''s involvement will also help to ensure that any environmental/social issues related to the project are addressed in a manner consistent with World Bank Group policies and guidelines.