On March 30, the Japan International Cooperation Agency (JICA) signed a loan agreement of up to 12 billion yen with Neoenergia Pernambuco*, which operates an electricity distribution business in the state of Pernambuco in the northeastern part of the Federal Republic of Brazil under a business license from the Brazilian government, and held a ceremony on May 11 to celebrate the signing. A ceremony was held on May 11 to commemorate the signing. The funds from this loan will be used for the inspection, renovation, and renewal of existing power distribution facilities to improve the efficiency of energy use in the state. The loan will be co-financed by Mitsubishi UFJ Bank, Ltd.
While renewable energies account for a high percentage of power generation in Brazil, the country is mostly dependent on hydropower, and thus suffers power shortages and power price spikes every drought season. However, diversification of power sources is increasing the load on power grids and accelerating the deterioration of existing facilities, and there are concerns about the impact on the stable and efficient supply of electric power.
The state of Pernambuco, the site of this project, is located in the northeastern part of Brazil, where the largest number of poor people live, and the poverty rate, income disparity, and unemployment rate are all high compared to the average for the entire country. The state intends to promote economic growth through industrial diversification by attracting foreign and non-regional companies as a countermeasure against poverty.
Neoenergia Pernambuco has been providing electricity distribution services in the state over the past 20 years and has more than 3.88 million customers. This project will support Neoenergia Pernambuco to improve its power distribution facilities between 2023 and 2025, thereby contributing to the stabilization of electricity supply in the state by promoting energy conservation through increased power supply capacity and reduced power loss. It will contribute to SDGs (Sustainable Development Goals) 7 (Energy for All and Cleaner), 10 (Eliminate Inequality among People and Nations), 13 (Take Concrete Action on Climate Change), and 17 (Achieve the Goals through Partnerships).
(Note) The registered name of the company in Brazil is Companhia Energetica de Pernambuco – CELPE
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