The BRL 19.3 billion financing that the National Bank for Economic and Social Development (BNDES) approved for Águas do Rio, a concessionaire controlled by Aegea to operate water and sewage services in two blocks in the state of Rio, is the second largest in the history of the development institution.
It is second only to the BRL 23.4 billion loan granted in 2012 to Norte Energia, the company that controls the Belo Monte Hydroelectric Power Plant, in Pará, according to data on the BNDES website.
Aegea informed about the approval of the financing in a material fact released this morning. The company informed that the financing contracts will be signed in the coming days.
The billionaire financing for Águas do Rio brought a series of innovative instruments, taking another step towards an operation of “project finance”pure, a model in which the guarantees are all allocated in the investment project itself, and not in the parent company, said Infrastructure Credit director, Solange Vieira. The executive classified the approval of the operation as “emblematic”.
“The bank is ready to act in project finance non recourse“, said Vieira to Broadcast, Grupo Estado’s real-time news system. “All these instruments are very important for the development of infrastructure, because it leverages projects. We need the structurers (of infrastructure concessions) more than their balance sheets”, added the BNDES director.
According to the BNDES, financing for Águas do Rio is a “project finance limited resource” because, although the development bank assumed the project risk in part of the value, without guarantees or corporate guarantees, BRL 4 billion of the total BRL 19.3 billion was in “back stop” credit insurance.
The concessionaire will withdraw these R$ 4 billion only if it cannot find other sources of financing. This portion of the BNDES financing has corporate guarantees from Aegea and has a shorter term.
As reported by the BNDES, the financing package for Águas do Rio will reach a total leverage of around R$ 25 billion, including R$ 19.3 billion from the development bank.
The remainder of the amount should be completed with debenture issues and loans from multilateral organizations, but the final closing of the financing package is still being negotiated by Aegea.
The BNDES expects to lend around BRL 15 billion, without withdrawing BRL 4 billion from insurance. The tendency is for more debenture issues, in 2023 and 2024, to replace the value.
Source: CNN Brasil
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