The Brazil is a beacon for GDF Suez market

Finally, the way is clear. After months of legal battle, the kick-off of the larger site of GDF Suez to the Brazil will be given. The Franco-Belgian group comes to appeal the lifting of the ban for the construction of the dam of Jirau, in the Amazon, whose installed capacity amounted to 3,300 megawatts. A contract of some 4 billion euros, six months ago to a consortium led by GDF Suez (50.1), but that is the subject of numerous challenges on the part of environmentalists. Interlocutory judgment had prohibited the installation of the site last month. Federal justice finally restored the advantage to investors.

"Jirau is top priority," said Mauricio Bähr, the President of Suez Energy to the Brazil. It is one of the two large hydropower plants that the Government has decided to build on the Madeira River. It appears prominently in the phare programme of President Lula, the growth acceleration program. The beginning of the production is planned for 2012.

Promising market

The Brazilian Government, which wants to avoid any prospect of electricity shortages, is in the camp of the investors. The Brazilian Minister of energy, Edison Lobão, reiterated it the week last to Gérard Mestrallet. During his stopover in Brasilia, the pattern of GDF Suez was also received to the Supreme Court "to better understand the functioning of the judicial system", provides in his entourage.

However, environmentalists have not said their last word. They seem determined to delay the deadline using all legal means to Brazilian, complex legislation. "I would like to work our engineers a little more than our lawyers," sighs one senior French official.

The game is worth the candle. The Brazil is a beacon for GDF Suez market. The Franco-Belgian group is already the largest producer of electricity in the private sector, with a capacity of 7,000 megawatts, the highest in the world for the company outside the Belgium. In the country, yet untapped hydraulic potential amounts to some 230,000 megawatts. A new call for tenders for a mega-project more of 10,000 megawatts still in the Amazon will be launched next year.

Despite the financial crisis, the "economic setting of the Brazil" may seem "enviable" in some European countries, note Gérard Mestrallet, CEO of the group. Economic growth, which will exceed 5 for the second year in a row in 2008, has a good chance of rebounding from 2010, according to Ilan Goldfajn, one of the economists consulted by GDF Suez.

Energy appetite is enormous. "The Brazil needs of 4,500 additional megawatts each year" to support the effort of growth in the medium term, is Dirk Beeuwsaert, supported the Division of international energy of the group, which is also interested in the resumption of the Brazilian nuclear program. "We do delay not", provides Gérard Mestrallet. He recalled that the Group has maintained its investment of EUR 30 billion in three years, announced program at GDF-Suez Merger.

The short term, however, the international crisis may well slow the pace of demand. Already, large industrial announced cuts of production in the Brazil, as the mining giant Vale or PSA, while other industrial projects are deferred. But the crisis may also have a positive impact for GDF Suez in the country: well capitalized, the group is able to take control of other electricity companies who meet financial difficulties. He already facing opportunities.