Epidemic affects revenue The Brazilian government is considering providing emergency loans to power distribution companies

Brazilian electricity distribution association Abradee told Reuters on Monday that the Brazilian government is considering a possible emergency loan option for power distribution companies that are facing lower energy consumption and lost revenue due to the coronavirus outbreak
.

Abradee Chairman Marcos Madureira said the package the government was discussing could involve loans from the national development bank BNDES or multiple banks, but the value of those loans and other details had not yet been settled
.

Madureira said the plan is similar to the measures taken in 2014 and 2015, when the industry lent about 22 billion reais to Brazil, which is experiencing its worst recession
in history.

At that time, public and private banks including BNDES, Caixa Economica Federal, Itau Unibanco and Banco Bradesco were involved in these loans
.

Three sources involved in the discussion told Reuters that the Ministry of Mines and Energy and energy regulator Aneel were considering the matter
.

Distribution companies are concerned that reduced electricity usage due to the coronavirus outbreak could lead to significant revenue losses
.

Currently, the coronavirus has led to widespread lockdowns of non-essential businesses in Brazil, while citizens have been told to stay at home
.
This has led to reduced incomes for many hourly and non-regular workers in Brazil, who may not be able to pay their electricity bills
.

Aneel ruled last week that distribution companies must continue to provide power to people who fail to
pay within 90 days of the crisis.

One of the sources said the government sees the package of loans as a way to
avoid a chain of potential defaults in the sector.

The largest investors in Brazil's power distribution sector include Italy's Enel, Spain's Iberdrola subsidiary Neoergya, China's State Grid subsidiary CPFL Energia, and local company Energisa e Equatorial Energia
.