BNDES Forecasts R$ 34 Billion for Brazil's First Battery Storage Auction

The Brazilian National Bank for Economic and Social Development (BNDES) has estimated up to R$ 34 billion in resources from its incentivized lines to finance energy storage projects for the country's first auction of this technology. Alexandre Siciliano Esposito, the head of the BNDES energy transition and climate department, stated on Friday that additional funding sources will be necessary to meet the expected demand. The preliminary estimate includes funds from the Fundo Clima, which focuses on decarbonization and energy transition, and the Mais Inovação program. A more precise amount is expected by the end of the year during discussions for the 2027 budget law.

Esposito noted that the Fundo Clima will likely be the primary vehicle for financing because battery energy storage systems (BESS) score higher than other renewable technologies. However, he highlighted a limitation where the Fundo Clima caps financing at R$ 1 billion per economic group every 12 months. Since some clients are planning portfolios worth billions of reais, the bank suggests a blend of funding including debentures, multilateral sources, and the market. Esposito warned that financing needs could be explosive depending on the government's contracting demand, noting that a previous capacity auction for traditional thermal and hydro technology required over R$ 60 billion in investment.

The BNDES is currently working with suppliers to encourage the nationalization of projects, as the December auction will include a specific competition for batteries with national content. Companies including WEG, Moura, You.On, TBEA, Gotion, Trina, and BYD have declared commitments to local BESS manufacturing, though they must still pass technical evaluations. The auction has already seen a record registration of over 296 gigawatts of projects, which will undergo technical analysis before the event. The electrical sector expects the auction to improve energy security as renewable energy sources continue to grow.