Funded in 1997, Neoenergia is an integrated energy company that operates in 19 Brazilian states through the generation, transmission and distribution segments. It owns five distribution companies that bring energy to over 15.8 million consumers – i.e. 16% of the Brazilian population. It has five transmission lines (2,333 km) and 10 substations in operation, and over 4,301 of lines under construction. It has an installed capacity of 4.5GW, split among hydroelectric plants (67%), wind farms (22%) and thermal (11%). Lastly, it also operates in the liberalized business. Neoenergia has been a publicly-traded company since June 2019, with shares traded in the Brazil Stock Exchange. It is majority owned by Spanish group Iberdrola (53.5%). The PREVI pension fund holds a 30.3% interest, and the remaining shares are free floating.

Neoenergia Coelba was first incorporated as a State Owned Entity in 1960. It was privatized in 1997 and awarded as a concession to Neoenergia, which has been operating it ever since. Neoenergia Coelba operates in the state of Bahia, the 4th largest Brazilian state by population. In 2021, it supplied over 21.2 TWh of energy to more than 6.2 million customers. Its installed infrastructure comprises over 277,000 km of networks, 3.6 million poles, 7 million transformers and 337 substations.

The proposed investment consists of an 8-year green + sustainability-linked loan of up to BRL 550 million from IFC’s own account. It will finance part of Neoenergia Coelba’s 2023 capex program, namely network expansion and renewal (excluding transmission lines), substation upgrades and digitalization programs.

State of Bahia, Brazil

 This is a Category B project according to IFC’s Policy on Environmental and Social Sustainability. The environmental and social risks and impacts associated with this project are limited, site-specific and can be readily addressed through generally accepted mitigation measures as described in this document and the attached Environmental and Social Action Plan (ESAP).

Neoenergia Coelba has established an effective E&S management system (ESMS) and dedicated E&S teams to manage and monitor their E&S performance. Thus, the key Environmental and Social (E&S) issues associated with this project as identified during IFC’s review are related to (i) Neoenergia Coelba’s capacity and competence on the implementation of the corporate environmental and social management system (ESMS) to manage E&S risks in its expansion and operations, (ii) fair and safe working conditions and management of OHS aspects including response to the COVID crisis in terms of job protection and worker safety; (iii) contractor management in terms of all relevant E&S issues, including working conditions and OHS; (iv) emergency response and preparedness; (v) gender, sexual harassment and Gender-Based Violence (GBV) issues at the workplace; (vi) resource and energy efficiency, and management of waste and emissions; (vii) land acquisition; (viii) biodiversity screening and management; (ix) impacts on Indigenous Peoples and ethnic traditional communities; (x) protection and management of cultural heritage sites, and (xi) stakeholder engagement.