VBC Energia S.A.

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MIGA issued a $100 million guarantee to VBC International Corporation in the Cayman Islands for half of its loan guaranty of a $200 million loan from Banque Sudameris of France to VBC Energia, S.A. (VBC Energia). The investment will help facilitate VBC Energia's expansion and privatization efforts in Brazil. The Inter-American Development Bank coinsured the second tranche of $100 million—the first project-based cooperation between the two institutions. The MIGA guarantee covers the investment against the risks of transfer restriction and a limited form of expropriation. ACE Global Markets provided reinsurance in support of the guarantee. The project involves the final stages of completing, upgrading, and expanding three power companies privatized by VBC Energia. The companies—Serra da Mesa, Rio Grande Energia S.A., and Companhia Paulista de Forca e Luz—are generators and distributors of energy in the states of Goias, Rio Grande do Sul, and Sao Paolo, which represent the fastest growing regions of Brazil. There, demand for electricity is growing faster than the gross domestic product. The generation and distribution of power will improve productivity in the region, allowing VBC Energia to better meet demand while decreasing the risk of power outages.

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