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Brazil : WB: META 2 to Modernize the Energy and Mining Sectors in Brazil
Publish Date : 26-May-2020
The World Bank Board of Directors approved today a US$38 million loan for the Energy and Mineral Sectors Strengthening Project II (META 2). Under the program, various Brazilian public institutions and sectoral agencies will be offered technical assistance activities varying from studies, training, methodologies, databases and IT equipment.
Brazilâ€™s energy and mining sectors are among the largest in the developing world and are key to the countryâ€™s growth. However, both still face challenges to realize their full development potential and promote environmental sustainability and social inclusion. The project will allow the production of more reliable power, at lower prices, and the economic benefits of growing more efficient, resilient and competitive energy and mining sectors.
â€œThe energy and mining sectors are among the main drivers of the Brazilian economy as they form the basis for the sustainability of the industrial and commercial sectors, in addition to leading to the provision of services that are essential for the quality of life of citizens. This project is a continuation of long-term collaboration with the World Bank. This new phase will promote changes to support the sustainable extraction and processing of minerals and metals to meet the needs of the global supply chain for inputs and new technologies. In energy, working together will make it possible to increase the efficiency and resilience of markets in Brazil,â€ said Bento Costa Lima Leite, Brazil Minister of Mining and Energy.
In Brazil, the electricity, oil and gas and mining and mineral processing sectors represent approximately 3, 13 and 4 percent, respectively, of the countryâ€™s Gross Domestic Product (GDP). These sectors, though, stand at different stages of development. The power sector is one of the most sophisticated in Latin America, but it is facing a number of challenges with respect to supply security, affordability and increasing its resilience to climate change. In the natural gas sector, Brazil has started adopting various measures under a new program aimed at establishing an open, dynamic and competitive natural gas market.This has significant potential to enhance energy security and to reduce industrial energy costs, but still needs to solve regulatory and governance issues. The mining sector requires modernization to achieve sustainable practices and a new strategy underpinned by sustainability.
â€œMETAâ€™s first phase provided technical assistance to strengthen the capacity of key public institutions to increase the sectorâ€™s contributions towards a lower carbon growth path that is environmentally and socially sustainable,â€ says Paloma AnÃ³s Casero, World Bank Director for Brazil. â€œThis second stage aims at increasing efficiency, long term infrastructure adequacy and climate resilience in both sectors, allowing them to grow in a more efficient and competitive way.â€
Among the outcomes supported by the Project are:
Increase efficiency, long term infrastructure adequacy and climate resilience in the energy and mining sectors;
Institutional strengthening of energy and mining institutions to establish and implement strategies, policies and regulation; and
Implementation support, monitoring and evaluation, knowledge sharing and dissemination.
This fixed spread loan from the International Bank for Reconstruction and Development (IBRD) to the Ministry of Energy is guaranteed by the Federative Republic of Brazil and has a final maturity of 20 years, with a 19.5 year grace period.