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The International Finance Corporation (IFC), the private sector arm of the World Bank Group, will provide up to US$90mn in financing to Comgás, the largest distributor of piped natural gas in Brazil. The loan consists of US$45mn equivalent for IFC’s own account and syndications of US$45mn equivalent. IFC’s financing will support the company’s plans to expand and upgrade its distribution network to make gas available to 70,000 new customers in the next five years, and 200,000 within 10 years.

Established in 1872 to provide street lighting in the city of Sao Paulo and privatised in 1999, Comgas is now the largest distributor of piped natural gas in Brazil, with 3,600km of lines in a concession area cover 177 municipalities. At present Comgás attends 45 municipalities in region of Sao Paulo, the Paraiba Valley, and the Campinas. It provides service to more than 420,000 residential, commercial and industrial customers and had net sales of R1.9bn (US$633mn) in 2003. Comgás plans to invest R300mns to improve service and deliver gas to new users.

Comgás is also developing the natural gas transportation sector by providing compressed natural gas to vehicles through a growing network of fueling stations. Its expansion plans aim to make it Latin America’s largest distributor of natural gas while maintaining quality, safety, and respect for the environment.

Francisco Tourreilles, director of IFC’s infrastructure department, says, “We are very pleased to be able to work with a leading private Brazilian gas distribution company and contribute to the country’s efforts to promote the use of natural gas. This project will have a significant development impact by helping reduce air pollution through the substitution of natural gas for heavy fuel oil. It will also improve access to a clean, low-cost, and reliable energy source .”

Atul Mehta, IFC’s director for Latin America and the Caribbean, adds, “This project fits well with IFC’s strategy in Brazil, to support infrastructure development as a means of improving economic prospects and quality of life. We are excited to partner with companies like Comgas that share our vision for sustainable development and a true commitment to protecting the environment.”

As Roberto Lage, director of finance at Comgás, also notes, “IFC’s long-term funding is essential to financing Comgas’ expansion programme in its concession area and will enable the company to extend the natural gas distribution network to 18 new cities in the State of Söo Paulo, Brazil.”

Lage, adds, “With the implementation of these investment plans, and the consequent displacement of existing pollutant fuels, Comgás will be making a significant contribution to the improvement of the environmental conditions in the concession area and increasing the use of natural gas in the country’s energy sector.”