Brazil could raise sourcing requirement beyond 60%

BRAZIL: Brazil's development bank is considering raising the local content sourcing rules for wind farms above the current 60% figure, according to reports.

Associacao Brasileira de Energia Eolica executive president Elbia Melo
Associacao Brasileira de Energia Eolica executive president Elbia Melo

In an interview, Elbia Melo, executive president of Brazil's wind energy trade association, the Associacao Brasileira de Energia Eolica, said the 60% ruling was not enough.

The rules are regulated by Brazil's development bank BNDES. Melo was unable to reveal the new figure.

Melo said: "The 60% requirement wasn’t a sufficient incentive mechanism. The game is very clear now. Suppliers have to comply with the rules to stay in Brazil and remain competitive."

The debate over local content requirements dominated the Brazil Windpower 2012 event in late August, as global turbine manufacturers met local suppliers in efforts to increase their use of domestic components and regain access to cheap local finance.

In June, Spain's Acciona, Denmark's Vestas, India's Suzlon, Germany's Fuhrländer and US firm Clipper were delisted by BNDES from its Finame financing programme after failing to abide by the bank's local content regulations.

Developers say access to Finame is essential as it offers the only local currency-based long-term finance that will reduce the risks in local contracts and competitive auctions, in which prices can be as low as BRL 99/MWh ($47/MWh).

There has been speculation that several wind turbine manufacturers are in talks to buy Brazilian suppliers to meet the country's local content rules.

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