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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