Another $2.9b in Loans for Brazil Power Sector

A pool of commercial lenders has agreed to extend an additional 6.6 billion reais ($2.9 billion) in emergency credit to Brazilian electricity distributors as drought causes power rates to soar, a senior finance ministry official said on Thursday.

Banks participating in the loan syndication include Itaú Unibanco Holding SA, Banco Bradesco SA (BBDO), Banco Santander Brasil SA, Grupo BTG Pactual SA, Citigroup Inc and state-run lenders Banco do Brasil SA and Caixa Econômica Federal, said Paulo Caffarelli, the finance ministry's No. 2 official.

About 3 billion reais will come from the state development bank BNDES, while the remaining amount will come from the other banks, Caffarelli said. The recipient will be CCEE, the country's spot market electricity clearinghouse, which will pay interest equivalent to 2.35 percentage points above the country's benchmark CDI interbank rate for both loans, he added.

(Reporting by Luciana Otoni; Editing by Peter Galloway)