Gestamp Wind Steel Pernambuco, S.A. (Brazil)

Sponsor:  Gestamp Wind Steel S.L.
Business:  Wind turbine tower production
Industry: Energy
Product: Joint venture loan
Total investment: 25 million euros
Resources: FIEX

Around the world, the countries where wind energy is reaching a significant size are essentially the countries that have a stable regulatory structure favourable to investment in wind farms. While Brazil first began to take an interest in wind power in the early 1990s, it was only recently, due primarily to a lack of regulatory incentives until 2003, that a significant number of new farms started to come on stream. The enactment of the PROINFA Act (Alternative Energy Incentive Programme) by Brazil's Federal Government in that year constituted an impetus that has proven to be instrumental to the country's wind energy industry. This programme, structured around two stages, seeks to develop technologies for producing electric power from renewables.

The investment reflects the importance of the energy industry as one of the strategic mainstays for Spanish enterprise in Brazil, both in terms of the size of the investment required and the volume of business involved. In wind energy specifically, Spain has accumulated extensive know-how and cutting- edge technology, which favour the internationalisation of the country's business fabric. Moreover, Brazil is regarded by Spanish trade authorities to be a high priority market for which a Comprehensive Market Development Plan has been designed by the Secretariat of State for Foreign Trade. COFIDES, in turn, has a facility for financing investment in Brazil.

Drawing on this facility and FIEX resources, in 2010 COFIDES granted GONVARRI STEEL INDUSTRIES' Brazilian subsidiary a joint venture loan for 9.54 million euros to finance the establishment of a production plant in that country.

Located in Brazil's Pernambuco region, the new plant, with a total investment of 25 million euros, will engage in the manufacture of steel towers for wind generators. The project is expected to create over 200 direct jobs in the next 5 years. GONVARRI STEEL INDUSTRIES, through GESTAMP WIND STEEL, its renewable energies division, intends to supply Brazil's promising market, identifying the opportunities afforded by its size, the scale of the country's wind resources and the substantial rise in renewable energy-fuelled electric power production in recent years.

GONVARRI STEEL INDUSTRIES, founded over 50 years ago, is a manufacturer and supplier specialising in steel products for the automotive, construction and manufacturing industries. Its two production plants in Brazil date back to 1999. The group is also present in Portugal, Poland, Germany, Slovakia, Russia, India, Mexico and Argentina.