2023.05.12
On March 30, the Japan International Cooperation Agency (JICA) signed a loan agreement with the Neoenergia Pernambuco (Note), which is operating a power distribution business in Pernambuco state in the northeast of Brazil under a concession license from the Brazilian government and a ceremony was held to commemorate the signing on May 11. JICA will provide up to 12 billion yen and the funds from this loan will be used to inspect, refurbish, and renew existing power distribution facilities with the aim of making energy use more efficient in the state. This initiative is co-financed by the MUFG Bank, Ltd..
While renewable energy accounts for a high proportion of the power generation in Brazil, most of this relies on hydroelectric power. This results Brazil to suffer from power shortages and electricity price spikes during each drought season. Brazilian government is therefore promoting the diversification of renewable energy sources. On the other hand, the burden on the transmission and distribution system is increasing and the deterioration of existing facilities is accelerating. These factors are raising concerns about the impact they will have on the ability to provide a stable and efficient power supply.
The project site, the state of Pernambuco, is located in the northeastern part of Brazil and is home to the largest number of poorest segment of the population. The state’s poverty rate, income disparity, and unemployment rate are all at high levels compared to the national average. The state is therefore working to attract foreign companies, as well as those from neighboring regions, to invest as a measure against poverty and intends to promote economic growth through industrial diversification. In this context, an increase and stabilization in the power supply through an expansion of the power system is also important.
Neoenergia Pernambuco has been providing power distribution services in the state for more than 20 years and has more than 3.88 million customers. By providing financial support for the development of power distribution facilities—increasing their capacity for distribution as well as reducing distribution losses—which Neoenergia Pernambuco is going to implement from 2023 to 2025, this project aims to promote energy conservation. In doing so, it will contribute to the stabilization of the state's power supply and to the achievement of SDGs (Sustainable Development Goals) Goals 7 (Affordable and clean energy), 10 (Reduced inequalities), 13 (Climate action), and 17 (Partnerships for the goals).
A ceremony held on May 11 in Recife, the capital city of Pernambuco
Neoenergia Pernambuco staff inspecting and refurbishing a substation
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