CDB provides loan for 735.85MW Sāo Manoel Hydroelectric Dam Project

Project narrative

In February 2014, China Three Gorges Corporation (CTG) acquired a 33.33% equity stake in São Manoel Energia S.A. — the project company responsible for the 735.85MW Sāo Manoel Hydroelectric Dam Construction Project — from EDP BRASIL SA. São Manoel Energia S.A. is a special purpose vehicle and joint venture of CTG (33.33% equity stake), EDP BRASIL SA (33.334% equity stake), and Furnas Centrais Elétricas S.A. (33.333% equity stake). The project had a total expected cost of BRL 2.7 billion ($1.13 billion). To finance this, BNDES provided two major loans directly to São Manoel Energia S.A.: (1) BRL 450 million on May 26, 2015 (contract ID#15202021), and (2) BRL 1.314 billion on August 11, 2016 (contract ID#16202511). In addition, evidence indicates that the China Development Bank (CDB) also provided financing in support of the project. However, it is not clear whether CDB’s support took the form of a direct loan to São Manoel Energia S.A. or an indirect loan channeled through BNDES. The size and terms of the CDB loan have not been publicly disclosed, and further research is needed to clarify whether the CDB financing was used to (a) support CTG’s acquisition of equity in São Manoel Energia S.A. or (b) co-finance the construction of the 735.85MW hydropower plant alongside BNDES. Construction of the Sāo Manoel Hydroelectric Dam began in August 2014. Water was stored in the dam’s reservoir in October 2017. The first of four generation units was connected to the grid on December 5, 2017, and the last unit was commissioned on April 7, 2018.