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April 26, 2018updated 11 Jun 2020 3:10pm

CELSE, GE and GS complete Sergipe I power plant project financing

US-based company General Electric (GE), Centrais Elétricas de Sergipe (CELSE) and Goldman Sachs (GS) have closed a R$3.2bn ($918m) project financing deal for CELSE’s 1.5GW Porto de Sergipe I power plant project.

US-based company General Electric (GE), Centrais Elétricas de Sergipe (CELSE) and Goldman Sachs (GS) have closed a R$3.2bn ($918m) project financing deal for CELSE’s 1.5GW Porto de Sergipe I power plant project.

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CELSE was incorporated by Brazil’s Eletricidade do Brasil (EBRASIL) and by Golar Power in 2015 for the generation and commercialisation of electric energy from gas-fired thermoelectric energy generation unities.

The power plant will be built in the municipality of Barra dos Coqueiros, which is nearly ten kilometres from Aracaju, the state capital of Sergipe.

For this project, GS issued the R$3.2bn ($918m) bond, supported by Swiss export credit agency (ECA) SERV in Brazilian Real, a market first for bond issuers and insurers.

It is reported to be the largest project bonds issued in the region and the largest private investment ever made in Sergipe.

“Securing financing for Sergipe I was a fundamental step in advancing the development of the project.”

GE will be constructing the power plant as a turnkey contractor using its three GE 7HA gas turbines, steam turbine, as well as heat recovery steam generator and transmission technology.

GE has also agreed to provide operations, maintenance, repairs and digital solutions for this project.

GE Energy Financial Services Global ECA Advisory managing director Guto Davies said: “GE has supported the project by securing a landmark financing deal through a leading global investment firm and export credit agency – Goldman Sachs and SERV – in a market first.

“This is a landmark transaction that brings local currency financing to a strategically important GE project and customer.”

Apart from the bonds issued by GS, CELSE has closed an additional R$1.3bn ($373m) in project debt, bringing the total financing for Sergipe I to R$4.5bn ($1.2bn).

CELSE president Eduardo Maranhão said: “Securing financing for Sergipe I was a fundamental step in advancing the development of the project.

“The ability to close this transaction demonstrates CELSE’s ability to meet the World Bank’s sustainable energy policies and underscores our commitment to sustainable development and the interests of the local community.”

During an auction conducted by the Brazilian Government in 2015, Sergipe I secured a total of 26 25-year power purchase agreements (PPA).

Upon completion in 2020, CELSE’s 1.5GW Porto de Sergipe I power plant project will be the largest thermal power plant in the country in terms of the capacity and is expected to fulfil 15% of northeastern energy demand in Brazil.

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IPO activity all but stopped in 2020, as the investment community grew wary of the effects of COVID-19 on economies. No matter how deserving a business was of flotation, momentum was halted by concerns of when a ‘new normal’ of working patterns and trade would set in. Recently, sentiment has changed. Flotations picked up again during the second half of 2021, and now in 2022 the mood is decidedly optimistic. Business leaders have their eyes on fast rebounding economies, buoyant market indices and the opportunity once again to take their businesses public. As a result, global IPOs are expected to hit back this year. With GlobalData’s new whitepaper, ‘IPOs in Consumer and Retail: 5 must-include elements for your prospectus industry report’, you can explore exactly what is needed in the essential literature. GlobalData’s focus lies in the critical areas to get right:
  • Macroeconomic and demographic environment
  • Consumer context
  • Industry environment
  • Competitive environment
  • Route to market
Interested to learn more about what to include in your IPO Industry Assessment report? Download our free whitepaper.
by GlobalData
Enter your details here to receive your free Report.

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