Brazil's Bndes to finance state power distributor

Brazil's Bndes development bank approved R1.394bn ($247mn) in financing for Rio Grande do Sul state's largest power distributor, in yet another effort to aid the flood-hit state.

The bank will award the money to power distributor RGE Sul to "adapt to climate change and mitigate its effects from the extreme weather events that affected Rio Grande do Sul in May," it said, referring to the devastating floods that hit the state earlier this year.

RGE Sul is responsible for around 65pc of the power in Rio Grande do Sul, with approximately 7.1mn clients.

The financing will also allow the state to maintain power prices stable until 2026, Bndes said. "This Bndes support will be essential to ensure that Rio Grande do Sul's population does not suffer from any adjustments to their electricity tariffs," mines and energy minister Alexandre Silveira said.

That is the latest in a series of government measures to aid the flood-ravaged state. In early May, President Luiz Inacio Lula da Silva signed a decree to ease relief spending. The country also launched a R50.9bn multi-step program to aid victims. Bndes created a R15bn fund — dubbed the Bndes emergency program for Rio Grande do Sul — of which it has approved R4.8bn, it said.

The heavy rains in late April and early May left around 150 dead and more than 500,000 displaced, according to Rio Grande do Sul's civil defense.

By Lucas Parolin