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08 Nov 17 20:16

Green Power Global again gathered some of the biggest international and local names within government and private sector under one roof in Rio de Janeiro. This year's event, Brazil International Renewable Energy Congress (BIREC) 2017, focused on recent developments in infrastructure and regulatory frameworks, solar- and wind-distributed generation, and energy storage and investments in project development.

A key insight was into the changing investment landscape for renewables. Brazilian Development Bank (BNDES) has been the main driving force for renewables in Brazil since 2003, having been responsible for nearly 60% of all wind and hydro investments. But, the cost of financing by BNDES has been significantly lower than the rates a private or institutional financier could charge. Starting next year, BNDES intends to increase their base rate and shrink this gap. With more private capital expected, many sessions focused on alternative financing, from green bonds to loans from multilateral agencies like IFC.

Swiss Re sponsored two discussions on tackling the high cost of capital and make financing more viable in Brazil, with panelists from IFC, Inter-American Investment Corporation, Climate Bonds Initiative, Proparco, and Banco de Nordeste. The panelists spent considerable time on the risks associated with each stage in the lifecycle and how they impact a project's financial viability and cost of financing.

Swiss Re's role was to explain how (re)insurance can be a risk-management tool that de-risks projects, and can reduce capital costs. We not only discussed the various traditional products that the industry currently offers, but also our parametric products for weather-resource risk for solar, wind and hydro projects, which may enhance the debt-servicing capabilities of these projects.

One lesson from the event: as BNDES reduces its involvement in the renewables sector of Brazil and private capital gears up to take that place, Swiss Re's role as a reinsurer becomes all the more critical — not only in closing the protection gap, but also as an enabler of financing.

Category: Sustainable energy: Solar, Wind

Location: Rio de Janeiro - State of Rio de Janeiro, Brazil


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