Powering Up the Source
Ensuring that Brazilians have an adequate supply of electricity is one of the government's major challenges. But outside investment remains limited.
Anyone who has ever visited the
immense Itaipú hydroelectric
plant on the Paraná River that
divides Brazil and Paraguay would be
astonished to think that crippling power
shortages could undermine Brazil's
growth prospects. This dam is so large
and the lake behind so vast that it is
often described as one of the seven
wonders of the modern world. Itaipú is
the largest dam of its kind in operation
anywhere in the world. Its 18 generating
units can generate 12,600 megawatts and
provide over one-fifth of Brazil's power
supply and nearly all the electricity
consumed in Paraguay.
Nonetheless, Brazil needs to invest
about $82 billion in its electric system
through 2020 to keep supply and demand
in line. The country needs to increase
generating capacity by 85,000 MW - the
equivalent of seven new Itaipú dams -
and lay 35,000 kilometers of transmission
lines. Traditional sources of finance such
as the BNDES development bank,
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