BNDES is to provide R$101M (US$46M) in funds towards the development costs of the 25MW plant being built by Bahia PCH I, a subsidiary company of Neoenergia. The loan is approximately three-quarters of the total cost of the project, which is R$134.8M (US$61M).

The Sitio Grande plant will have assured power of 19.6MW. It is being developed on the Femeas river in the municipality of Sao Desiderio, in the north east state of Bahia.

Work on the project will include reforestation of the banks of the reservoir, which BNDES noted could help increase carbon credits. The plant is scheduled to be operational by the end of this year. The developer obtained the installation licence for the project in the third quarter of 2007 and construction work began just over a year ago.

BNDES said that, in total, it has helped to fund three small hydro plants with combined capacity of 73MW in the first quarter of this year. It added that over the last six years it helped to fund 83 small hydro plants with combined capacity of 1.7GW.

Separately, Neoenergia is leading a consortium to develop the 261MW Dardanelos project in Matto Grosso state. It has a majority share in 93.6MW Corumba III, in Goias state, and is investing in the 140MW Baguari project.

In funding for large hydro schemes in Brazil, most recently – in February – BNDES approved a loan of R$7.2B (US$3.26B) for the 3.3GW Jirau project on the Madeira river in west Brazil. The plant is being built by a consortium led by GDF Suez, and is part of the Madeira scheme which also includes the 3.15GW Santo Antonio plant.