CDB provides $750 million loan to BNDES for construction of Third Section of GASENE Pipeline

On December 27, 2007, China Development Bank (CDB) provided a $750 million loan to the Brazil Development Bank (BNDES), which it then on-lent to Transportadora Gasene (a subsidiary of Petrobras, the Brazilian national petroleum company). The loan fully disbursed. It carried an interest rate of 2.4%. However, its other borrowing terms are unknown. Transportadora Gasene was responsible for the construction and future ownership of pipelines for transport of natural gas with a total length of 1.4 thousand kilometers and a transport capacity of 20 million cubic meter per day, connecting the Cabiúnas Terminal in Rio De Janeiro to the city of Catu, in the state of Bahia. The Gasene project sought to establish a natural gas pipeline between northeast and southeast Brazil. The CDB loan was to be used to fund the Cacimbas-Catu phase (section) of the project (also known as GASCAC or GASCAV). BNDES was also expected to provide counterpart financing for the Cacimbas-Catu phase (section) of the project. Previously, in 2004, BNDES and Transportada Gasene signed an agreement for the construction of the $1.3 billion GASENE Southeast-Northeast Integration Pipeline in Brazil. The pipeline project was broken into three sections: the Cabiunas-Vitoria section, originally scheduled for completion in 2008; the Vitoria-Cacimbas section, which became operational in November 2007; and the 946 km Cacimbas-Catu section, funded by CDB. Sinopec was responsible for the construction of the Cabiunas-Vitoria (first) section and Cacimbas-Catu (third) section of the pipeline. Construction of the third section began during the first quarter of 2008 and ended in March 2010. The third section of the pipeline was officially commissioned and put into use in September 2010.

Additional details

1. The loan's interest rate (2.4%) is recorded in the World Bank's Debtor Reporting System (DRS). See https://www.dropbox.com/s/ab8qt4n6jijcbhd/IDS_Average%20interest%20on%20new%20external%20debt%20commitments.xlsx?dl=0 and https://www.dropbox.com/s/2sw4f7gluxa52fk/DRS%20Official%20Commitments%20from%20China%20Through%202021.xlsx?dl=0 2. China Eximbank was originally set to fund the project (see https://www.dropbox.com/s/bk069tyi3i28wz0/brazil-loan.pdf?dl=0); however, a contract could not be reached with BNDES over the percent of local labor to be used.

Number of official sources

7

Number of total sources

26