China Construction Bank loans R$ 96,894,000 for the Belo Monte Transmissora de Energia S.A [Linked to Record ID#59863 and #59898]

Project narrative

In 2016, the China Construction Bank loaned 93,100,000 Brazilian Reals to Eletronorte (an electricity a generation and transmission subsidiary of Eletrobras) for the Belo Monte Transmissora de Energia S.A., which is a special purpose vehicle created to construct transmissions lines from the Belo Monte dam on the Xingu River in the state of Para, to the Brazilian Southeast. According to the SEC, the disbursed amount was 96,894,000 Brazilian Reals. The transaction amount has been recorded as such. The transmission line will have 2,100 kilometers and will cross four states: Pará, Tocantins, Goiás, and Minas Gerais. It begins at the Xingu Substation, located approximately 17 kilometers from the Belo Monte Hydropower Dam, in the municipality of Anapu in Para Sate, and extends to the Estreito Substation, located in the municipality of Ibiraci, in Minas Gerais, close to the border with São Paulo State. The estimated construction cost is R $5.1 billion (US $1.6 billion) and the projected start of operations is early 2018. State Grid won the bid for the construction of the first transmission line in February 2014, forming a consortium called Belo Monte Transmissão de Energia (BMTE). State Grid retained control with 51 percent, whereas two minority partners are controlled by Eletrobras: Eletronorte (24.5 percent) and Furnas (24.4 percent). Construction of the project began in August 2017. The converting stations have completed the earthworks, and civil works are already underway. The assembly of structures is in progress, according to the Agência Nacional de Energia Elétrica (ANEEL) and the agency responsible for evaluating the safety and continuity of Brazil’s electricity supply. As of April 2017, the degree of fulfillment of the contract was 67 percent for physical development and 87 percent for general development. However, problems were reported in some parts of the work. According to Costa (2017), the Chinese contractor SEPCO1, responsible for sections 1 and 2 of the project, had reached 20 percent and 57 percent of the planned work in early 2017, respectively. In the other 6 sections, the project was nearly 78% complete. The project was completed in March 2019. According to the World Bank PPI, State Grid Corporation of China provided 316.8 million USD worth of equity, giving it 51% ownership of the project.