Brazil Wind Power, the key industry event for Brazil’s booming wind sector, took place in Rio de Janeiro last week. The conference part of the event offered a wealth of information on the potential of this fast emerging sector, while conversations with exhibitors at the affiliated exhibition provided a valuable insight into the industry developments on the ground in Brazil.

New players are emerging in the supply chain, where demand for locally Brazilian produced equipment is being fuelled by the requirement for loan financing from development bank BNDES that the turbines and other products purchased by project developers are predominantly manufactured domestically. There is understood to be something of a bottleneck in the supply chain, with insufficient volumes of locally manufactured towers to supply the projects under development. In terms of blades, a new Brazilian player has emerged in Fortaleza, in the north of the country. Aeris Energy has been established with management who were formerly employed by Tecsis (the blade manufacturer based in the south of Brazil, which is a major supplier to GE). Aeris has received financing from Suzlon of India. It is constructing a plant in Ceara and expects its first equipment to be rolling off the production line early in 2012. It will supply Suzlon, already a major player in the Brazilian wind power market.

In terms of financing for wind in the north east of Brazil it has emerged recently that Banco do Nordest, the development bank for the Northeast region of the country (where much of the wind resources are concentrated) will no longer provide preferential interest rates to wind project developers. The bank has provided loans at rates of around 7% for certain projects, compared to 10% loans by BNDES (the national development bank). However, Banco do Nordest’s mandate has shifted and the bank will focus in future on micro financing, rather than larger project financing. This will make financing conditions tougher for certain projects – although the impact will be offset by the recent cut in interest rates by the Brazilian central bank. The move looks set to result in an increased role in project finance for wind energy projects on the part of private sector banks going forward.