The government of Brazil will launch an investment fund of up to $6.5bn to increase renewable energy generation in the country’s north-eastern region.
This move comes in response to increasing interest from large industries to invest in wind power to meet their energy needs.
The proposed fund will comprise private investors and state-owned utility Cia Hidro Eletrica do Sao Francisco, known as Chesf, Bloomberg reported, citing Brazil Energy Minister Eduardo Braga.
Private investors will own 51% of the fund, while Chesf will own the remaining 49% stake.
Brazil’s National Social and Economic Development Bank will manage the fund, which will finance up to 8GW of new wind and solar capacity in the region, according to Recharge.
Commenting on the finance, Braga was quoted by Bloomberg as saying: "We are on the eve of a major announcement.
"With the fund, subsidies will no longer be a burden for Brazil’s Treasury and become a catalyst for north-east region development."
Chesf, which currently receives government subsidies for power purchases, will no longer receive such financial aid.
Braga will seek approval from President Dilma Rousseff for the fund, for which the final studies are nearing completion. He said that the new capacity created to supply the industrial users will allow Chesf to supply its existing generation for Brazil’s hard-pressed power network.
Image: Brazil to launch new fund in response to increasing interest from large industries to invest in wind power. Photo: courtesy of xedos4 / freedigitalphotos.