Nordeste Generation Ltda. (Nordeste)

MIGA has provided Keppel FELS Energy Pte. Ltd. of Singapore a $50 million guarantee to cover its investment of over $100 million in Nordeste Generation Ltda. (Nordeste) of Brazil. The coverage is for three years and is against the risks of transfer restriction and expropriation, including the failure by the host government to honor its payment obligation under the Host Government Guarantee to the electrical power supply contract issued in favor of Nordeste. $80 million of this exposure has been syndicated though MIGA's Cooperative Underwriting Program.

Brazil is in the midst of a severe energy crisis, caused by underinvestment in new generation and transmission capacity and made worse by a series of droughts in recent years, due to dependence on hydro generating facilities. The state of Bahia, in northeastern Brazil, has been among the most affected by the droughts, which caused serious electricity shortages. This project involves the installation, operation and maintenance of a barge-mounted emergency power generation facility in Bahia, to address the short-term demand until new, permanent gas-fired power projects are brought on line and can put their energy contribution into the national grid. In addition to the benefits to residents in northeastern Brazil, the project is expected to generate significant tax revenue during its three years of operation. The project will employ up to 300 local people for construction and an estimated 160 during operation. Training for the employees will be provided by the sponsor.