Summaries of proposed guarantees are provided prior to Board consideration and before final contract signing, and they are therefore subject to change. Project briefs are disclosed after Board consideration and contract signing and reflect the terms of the project at the time of contract signature. Environmental and Social Review Summaries are provided for projects assigned an Environmental Assessment Category of A or B.
- Project name
- Nordeste Transmissora de Energia SA
- Project ID
- Fiscal year
- Not Active
- Guarantee holder
Dragados Industrial SA
- Investor country
- Host country
- Environmental category
- Gross exposure
- $23.1 million
- Project type
This project is part of a larger undertaking involving the construction of five energy transmission lines in different parts of Brazil to reduce existing infrastructure bottlenecks in the country’s energy sector. Each of the lines involves a concession agreement with Brazil’s federal electricity regulatory agency for the construction, operation, and maintenance of the transmission line. The concessions were subject to international competitive bidding.
The Xingó-Campina Grande transmission line, sponsored by Nordeste Transmissora de Energia SA, involves the construction and operation of a 193-kilometer transmission line from an existing substation in the state of Sergipe to the state of Pernambuco, and a 186-kilometer transmission line from Pernambuco to the state of Paraíba. The project is expected to significantly improve the reliability of power delivery to the Northeast power grid.
The project responds to a need to compensate for low investment levels in the country’s energy sector, a result of austerity programs in the 1980s. Given that most of Brazil’s energy is produced by hydroelectric dams subject to fluctuations in water levels due to drought, the interconnected electrical system will allow for a more efficient and reliable delivery of energy.
The project will operate under a Brazilian program that calls for public-private partnerships in its electric energy concessions. Investments undertaken through the program, instituted in 1999, have resulted in an estimated 20 percent increase in electrical capacity and the generation of about 25,000 jobs. The five new transmission lines underwritten by MIGA will account for about 25 percent of overall electricity transmission. Other development impacts include the generation of taxes and royalties, purchase of local materials, creation of competition, expanded public access to electricity, and job training.
The project is in line with the World Bank Group’s Country Assistance Strategy, which aims, among other things, to help Brazil become more competitive by improving its infrastructure.