IDB boost for Brazilian hydroelectric projects

By Helen Wright29 July 2011

The Inter-American Development Bank (IDB) has approved a US$ 128 million loan to support the modernisation of two hydroelectric power plants in Brazil.

The funds are planned to extend the service life of the Furnas Hydroelectric Plant in Minas Gerais and the Luiz Carlos Barreto de Carvalho Hydroelectric Plant near São Paulo by 30 years.

Owned and operated by Brazilian state-owned energy utility Furnas Centrais Elétricas, the plants have been operating since 1963 and 1969 respectively, and are already long past their intended lifespan of 30 years.

The two facilities were designed to produce 2266 MW, but the age of the plants means the turbines require increasingly frequent repairs. The IDB funds will support Furnas' total US$ 600 million program to restore the turbines, generators and mechanical equipment and enable the plants to continue operating beyond 2040.

"Building new electricity generation plants to make up for these shortfalls would cost up to four times more per megawatt than refurbishing the existing facility," the IDB said, adding that Brazil's electricity demand was growing at a rate of +5.2% per year.

Likely to be replicated

IDB project team leader Alejandro Melandri said Furnas' approach was likely to be replicated by other utilities throughout the region. "Latin America and the Caribbean depend on hydroelectricity for more than 60% of their total electricity production more than any other region in the world," he said.

"But today, more than 30% of the region's large hydroelectric complexes are over 30 years old, so refurbishing is emerging as a very attractive option."

Last year, the IDB approved a US$ 700 million loan to refurbish turbines in Venezuela's Guri hydroelectric complex, and said several similar projects were currently being discussed.

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