China Construction Bank contributes to BRL 5.5 billion syndicated loan for Conta Escassez Hídrica Project (Linked to Record ID#96339)

Project narrative

In May 2022, Câmara de Comercialização de Energia Elétrica (CCEE) — a private, non-profit clearinghouse for Brazil's electricity sector — signed a BRL 5,503,981,615.69 syndicated loan agreement with 14 Chinese and non-Chinese banks and financial institutions for the Conta Escassez Hídrica Project. Participants in the loan syndicate included Banco do Brasil, Banco Bradesco, Banco Santander (Brasil), Itaú Unibanco, Banco Nacional de Desenvolvimento Econômico e Social – BNDES, Banco Citibank, Banco Votorantim, Banco Safra, Banco de Investimentos Credit Suisse (Brasil), Banco Sumitomo Mitsui Brasileiro, Banco Abc Brasil, Banco Bocom BBM, China Construction Bank (Brasil), and Banco Alfa de Investimento. Banco Bocom BBM — the Brazilian subsidiary of Bank of Communications (a Chinese state-owned bank) — contributed BRL 511,870,290 to the syndicate (as captured via Record ID#96339), while China Construction Bank (Brasil) contributed BRL 198,143,338 (as captured via Record ID#96345). The loan carried the following borrowing terms: a 4.5-year maturity, a 1-year grace period, an annual interest rate of CDI plus a 2.8% margin. It was scheduled for repayment between June 15, 2023 and December 2027. The loan was secured by (i.e. collateralized against) a fiduciary assignment of credit rights deposited in an account owned by CCEE (known as 'Conta Escassez’). The proceeds of the loan were to be distributed by the borrower to 66 electricity distribution companies ('concessionárias e permissionárias de distribuição’). The purpose of the loan was to provide emergency financial (‘bailout’) support to Brazilian power distributors affected by the COVID-19 pandemic. The costs of borrowing were expected to be passed on to consumers through electric bills. The loan fully disbursed. However, no additional implementation details were available as of March 2023.