Brasília - President Luiz Inácio Lula da Silva, speaking at the inauguration of the Brazil Energy Fund (Fundo Brasil Energia) declared that there is no longer any danger of electricity rationing such as occurred in 2001. Lula said that for the last two years the government has been consolidating the country's energy grid and working to ensure investments in infrastructure. "The situation today is the exact opposite of what it was in 2001," said Lula. "We have good weather and fair winds in our energy future thanks to the work done by minister (Energy and Mines) Dilma Rousseff. She has prepared the ground so that Brazil will never again have blackouts and drawn up energy sector contracts that are clear and transparent."

Lula went on to praise the new energy sector regulatory system. "The risk for investors is zero," said the president, adding that investments in infrastructure and long-term development projects are "once again a good thing," especially with the expected congressional approval of the Public-Private Partnership program.

As for the Brazil Energy Fund, its target is to invest US$276.4 million (R$740 million) by the end of 2006, in alternative sources of electricity which will add 3,300 MW to the country's grid. The fund's emphasis will be on "clean energy sources," such as biomass, windmills and small hydroelectric power plants.

The fund is to get money from six pension funds. Lula commemorated the decision by the funds, saying that they could finance much more, including low-cost housing.

Agência Brasil
Reporters: Gabriela Guerreiro and Iolando Lourenço
Translator: Allen Bennett
12/21/2004