1 THE ENERGY SECTOR AND INVESTMENT THE ENERGY SECTOR AND INVESTMENT OPPORTUNITIES IN BRAZIL OPPORTUNITIES IN BRAZIL Brazil Energy Summit New York, June 23 rd , 2008 Luciano Coutinho Luciano Coutinho President President Brazilian Development Bank - BNDES Brazilian Development Bank - BNDES
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1 THE ENERGY SECTOR AND INVESTMENT OPPORTUNITIES IN BRAZIL Brazil Energy Summit New York, June 23 rd, 2008 Luciano Coutinho President Brazilian Development.
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THE ENERGY SECTOR AND INVESTMENT THE ENERGY SECTOR AND INVESTMENT
The Brazilian strategy for the energy sector envisages: Efficiency in the production and distribution of energy for a sustainable
development; An increase in the share of biofuels in the energy matrix;
Environmental protection;
Protection of consumers’ interests; and
Promotion of social development.
Brazil: Energy supply and demand (2005-2030)*Millions tonnes oil equivalent
219
279
398
165206
289
403
557
100
200
300
400
500
600
2005 2010 2020 2030
Supply Demand
Source: Ministry of Mines and Energy. *2010, 2020 and 2030: forecasts.
Brazil: Electricity supply and demand (2005-2030)*Million Tonnes Oil Equivalent
3238
55
75
31
39
51
73
0
20
40
60
80
2005 2010 2020 2030
Supply Demand
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Development of bioenergy and the biomass
Long-term prospects:
Consolidate the country’s leadership in ethanol;
Develop cellulosic ethanol;
Develop agrobiotechnology and nanotechnology;
and
Develop correlated industries.
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Brazilian Energy Matrix (I)
Sugarcane share in total Brazilian Energy Matrix is 14.6%
Hydroelectricity share in total Brazilian Energy Matrix is 14.8% Fonte: Ministry of Mines and Energy – National Energy Balance 2007
Energy Matrix (%)Brazil & World - 2006
45
14
86
55
0
20
40
60
80
100
World Brazil
Renewable
Non Renewable
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Brazilian Energy Matrix (II)
Brazilian Energy Matrix (%)2006
Hydroelectricity share in total electricity is 90%
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Investments in Infrastructure - US$ Billion (2007/2010)Total % of Share.
ENERGY: 141.05 54.53 Oil and Natural Gas 91.87 35.52 Electric Power Generation 33.82 13.08 Renewable Fuels 8.93 3.45 Electric Power Transmission 6.42 2.48
SOCIAL & URBAN: 87.67 33.90 Housing 54.56 21.10 Sanitation 20.53 7.94 Water Resources 6.52 2.52“Light for Everyone” Programm 4.47 1.73 Subways 1.59 0.62
LOGISTIC: 29.92 11.57
Total 258.64 100.00
Growth Acceleration Program (PAC): 2007-2010
BNDES in PAC (05/31/08): 195 projectsPotential Financing – US$ 44 bi (70% energy)Total Investments - US$ 86 bi
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PAC Electric Power Generation and Transmission: prospects 2008
95 new plants will produce 3,120 MW: 2 Hydro, 13 Thermo e 4 Small Hydro Plants (1,562 MW); PROINFA (Alternative Sources) – 76 (1,558 MW).
4 auctions of new energy (mainly hydroelectricity): 7,000 MW
Start of 2,948 km in new Transmission Lines
3 auctions of Transmission Lines (5,691 Km)
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PAC Oil and Gas: prospects 2008
7 gasoducts under construction (1,557 Km).
Start of construction:7 gasoducts (1,831 Km);COMPERJ – refinery of 150 thousands barrels per day
of heavy oilSuape Petrochemical Complex.
Expansion of oil tankers fleet: 10 ships Suezmax – the first one to be launched in
2010;4 ships (capacity of 45 thousands tons) – the first one to
be launched in 2009.
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154
75
51 4632
0
30
60
90
120
150
180
EU (Cereal) USA (Maize) Australia(Sugarcane)
Thailand(Sugarcane)
Brazil(Sugarcane)
ETHANOL Challenges and Opportunities in BRAZIL
Cost of Ethanol Production (US$/barrel)
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Million ton % total1 Brazil 422.9 41.82 India 232.3 23.03 China 87.8 8.74 Pakistan 47.2 4.75 Mexico 45.2 4.56 Thailand 43.7 4.37 Colombia 39.9 3.98 Australia 37.8 3.79 Indonesia 29.5 2.9
10 USA 25.3 2.5Total 1,011.6 100.0Source: FAO
Top 10 sugarcane producers - 2005
ETHANOL Challenges and Opportunities in BRAZIL
2007 2008-2010 Total
Production(billion liters/year) 19.1 23.3 42.4
New plants 17 60 77
Investiments (US$ billion) 1.37 4.83 6.2
Targets for Ethanol
Ethanol surpassed gasoline consumption in Brazil (1.4 billion liters sold last February).Ethanol consumption growth of nearly 55% (Q1/08 vs. Q1/07) 90% of new vehicles in Brazil are flex fuel.