Completed Commercial AidData Chinese Aid

ICBC provides $1.01 billion overseas investment loan to facilitate CTG Brazil’s acquisition of the Ilha Solteira and Jupia hydropower dams

$1.01M USD

Funder	Industrial and Commercial Bank of China (ICBC)
Recipient Organization	Rio Paraná Energia S.A.
Country	Brazil
Start Date	Aug 22, 2016
End Date	Mar 25, 2027
Duration	3,867 days
Number of Grantees	1
Roles	Recipient
Data Source	AidData Chinese Aid
Grant ID	`88000`

Grant Description

ICBC provides $1.01 billion overseas investment loan to facilitate CTG Brazil’s acquisition of the Ilha Solteira and Jupia hydropower dams On November 25, 2015, CTG Brazil — a subsidiary of China Three Gorges Corporation (CTG) — won the bid to acquire the concessions for two major hydropower stations in Brazil, the Ilha Solteira hydropower plant and the Jupia hydropower plant, with an aggregate installed capacity of 4,995 MW.

The concession, which was won at auction for for BRL13.8 billion ($3.7 billion), of these Brazilian hydropower plants will run for a period of 30-years from January 2016.

As a result of the acquisition, CTG became the second major electric generator in Brazil, behind the state-owned Eletrobras.

In order to facilitate this acquisition, on August 22, 2016, ICBC Luxembourg provided a $1,012,370,000 overseas investment loan to Rio Paraná Energia S.A. — a special purpose vehicle that is wholly owned by CTG Brazil. The loan was issued in USD and it carried an interest rate of 6.20% in 2016 and 4.29% in 2017.

Its final maturity date was September 21, 2020. China Three Gorges Corporation issued a corporate guarantee in support of the loan.

The Ilha Solteira hydropower plant and the Jupia hydropower plant are located in the State of Sao Paulo and Masto Grosso do Sul at the junction of the Parana River, a distance of about 63.6 kilometers away from each other. Parana River is the second-longest river in South America, second only to the Amazon River.

The Ilha Solteira and the Jupia hydropower plants have been in operation since 1978 and 1974, respectively.

As of December 31, 2019, the installed capacity of the Ilha Solteira hydropower plant was 3,444 MW, and that of the Jupia hydropower plant was 1,551 MW.

📋 Staff Comments

China Three Gorges Corporation is a wholly state-owned enterprise directly under the purview of China’s State-owned Assets Supervision and Administration Commission of the State Council. CTG was set up in 1993 as the owner and operator of the Three Gorges Project — along the Yangtze River — the largest hydroelectric project globally by total installed capacity.
CTG has revealed in a bond prospectus that ‘our acquisition of the concessions for the Ilha Solteira hydropower plant and the Jupia hydropower plant, we received equity-linked financing from the China-LAC Cooperation Fund. This issue merits further investigation.
AidData has set the interest rate to the rate that applied when the loan was initially contracted (6.20%).

📚 Sources & References

ICBC Brazil S.A
Introducing ICBC's Cross-Border M&A Financing Services
New Kids on The Block China’s Arrival in Brazil’s Electric Sector
Hydropower
Duke Paranapanema Will Benefit from Its Acquisition by China Three Gorges
Three Gorges-led group bids for Brazil plant
THREE GORGES FINANCE I (CAYMAN ISLANDS) LIMITED
UPDATE 2-Brazil sells rights to run 29 hydropower plants for $4.51 bln
China-Latin America Finance Database
Demonstrações contábeis regulatórias em 21 de dezembro de 2019 e relatórios dos auditores independentes
Demonstrações Contábeis Regulatórias em 31 de dezembro de 2018 e 2017 e relatórios dos auditores independentes
Rio Parana Energia S.A.
Luxembourg, a European gateway for China: update on Private Equity and M&A
CTG Brasil takes over the operation of the Ilha Solteira and Jupiá hydropower plants
IMPORTANT NOTICE
Recent Insights
ECO SECURITIZADORA DE DIREITOS CREDITÓRIOS DO AGRONEGÓCIO S.A. Loan applications and disbursements are still being received and processed as the projects continue to evolve. Ongoing monitoring and evaluation are in place to ensure project continuity.

All Grantees

Rio Paraná Energia S.A.

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