Porto Primavera Transmissora de Energia Ltda. (PPTE)

MIGA has issued guarantees of $20.6 million to Cobra Instalaciones y Servicios S.A. (Cobra) of Spain to cover its $22.9 million equity investment in a transmission line project in Brazil. The coverage is against the risk of breach of contract and transfer restriction for up to 15 and 10 years, respectively.

The PPTE project consists of the construction and operation of two 230-kV transmission lines, both originating from a new substation in the Municipality of Rosana (State of São Paulo) but ending at two different existing substations: one near Dourados and the other near Campo Grande, both in the State of Mato Grosso do Sul. The new substation (Porto Primavera) is being built on Ilha do Bananal, near the left (southeast) bank of Rio Paraná on 8 hectares within the existing Porto Primavera (also known as Engenheiro Sérgio Motta) hydroelectric complex on the Rio Paraná, located just upstream of the confluence with the Rio Paranapanema, in the Municipality of Rosana. The project will be an interconnector between the Central West and the Southeast Regional grids.

Transmission lines in Brazil tend to cover large distances, resulting from the fact that most energy is produced in hydroelectric dams located far from major energy consumption centers. The interconnected transmission line system allows for more consistent generation of energy, as it permits regions of the country to continue receiving energy even if there is a dry spell.

For nearly two decades, investment in Brazil’s electricity sector remained low, a result of austerity programs begun in the early 1980s. But in an effort to spur economic growth, the Cardoso administration instituted reforms allowing private participation in the infrastructure sector. Today, most of the resources for expansion of transmission lines result from public-private partnerships, with 13,700 additional kilometers of lines having been constructed since the late 1990s, resulting in the direct employment of some 25,000 people.

The proposed project is part of this overall effort and is expected to further facilitate Brazil’s electricity distribution, providing a consistent energy source needed to fuel the country’s economic growth. The project is in line with the World Bank’s country assistance strategy for Brazil, one of the key objectives of which is to help the country become more competitive by improving its infrastructure.