Power Financing of the Year and Infrastructure Financing of the Year-Brazil: Gás Natural Açu

SPONSOR: Gás Natural Açu
LOCATION: Rio de Janeiro, Brazil
FINANCING TYPE & SIZE: $1.2 billion project financing
LAW FIRMS: Shearman & Sterling, Pinheiro Neto, Milbank, Mattos Filho

Gás Natural Açu (GNA) is one of the most ambitious power projects ever undertaken in Latin America. A fully integrated liquefied natural gas (LNG) to power project, it includes three massive projects: an LNG port, a power plant and transmission lines. It’s one of the largest infrastructure projects in Latin America that will generate the 1.34 GW in Porto de Açu in the state of Rio de Janeiro.

A joint venture formed by Prumo Logística, BP and Siemens, GNA will be able to deliver power to a city of 4 million when it begins operations in 2021. Siemens also signed a long-term service agreement to operate and maintain the plant.

“It’s a multinational project,” says Bernardo Perseke, CEO of GNA.

Instead of seeking dollar financing, it was decided to fund the project with reais to de-risk the currency uncertainty. Project financing totaled BRL4.5 billion ($1.2 billion) and was structured by KfW- IPEX, the German export credit agency and Brazil’s BNDES development bank. The IFC provided a 15-year loan in local currency to fund construction of the LNG plant.

The project already has 36 PPAs and will go a long way in diversifying Brazil’s energy sources, which depends on hydroelectric power for 70% of its needs. Long droughts in recent years have underscored the needforabetterenergymix.TheIFCsaysGNAwill also reduce Brazil’s carbon footprint by an estimated 139,000 tons of CO2 equivalent emissions annually.

The project is part of a broader LNG park. The company will also build the GNA II UTE with 1.7 GW of installed capacity. Together, the two plants will have a 3 GW capacity.