SAO PAULO (Reuters) – The Brazilian government is trying to bring aid packages to companies who are struggling in the electricity distribution sector at the end of May, Brazilian Mining and Energy Minister Bento Albuquerque said on Tuesday.
In a virtual address to Abdib’s industry group, Albuquerque said that under the terms of a potential package, electricity companies would be given access to loans from private and government-run banks to ensure their liquidity. They will then pay back the loan through an electricity tariff discount.
He did not show how big the loan potential was.
“We have started working … with Banco do Brasil SA and other actors in the financial sector, so we can build (a solution),” Albuquerque said, referring to one of the banks managed by the Brazilian government.
He added, however, that resources were scarce, and electricity distributors would compete with companies in other sectors of the economy that were devastated.
Brazilian utilities face excess energy this year between 20% and 40% due to a sharp drop in consumption during the coronavirus pandemic.
The energy distributor said the customer’s default rate had also jumped to 12% from 3% over the past month, Bento said.
Distributors in the relatively poor north and northeast of the country were devastated, he added.
Companies operating in the distribution sector in the region include Energia SA Equatorial, Energisa SA, Neoenergia SA and Enel SpA.
Reporting by Luciano Costa; Writing by Gram Slattery and Jamie McGeever; Editing by Bill Berkrot