Brazil calls end of energy rationing program

Feb 19, 2002 01:00 AM

The Brazilian government announced the end of a nationwide energy-rationing program that lasted for eight months and hurt the popularity of President Fernando Henrique Cardoso on the approach to elections to choose his successor. The rationing program officially ends March 1, according to Pedro Parente, head of the committee responsible for managing the worst energy crisis in Brazil's recent history, the result of a fierce drought.
About 90 % of the electricity used by Brazil's 170 mm inhabitants is generated by hydroelectric plants located on huge rivers that were severely affected by the drought, particularly in the eastern regions. The power shortage drove Cardoso's centrist administration, harshly criticized for its "lack of planning," to initiate an emergency rationing plan and promote investments in the energy sector.

Mining and Energy Minister Jose Jorge Vasconcellos recently announced that 43 bn reais (some $ 20 bn) will be invested in the energy sector by 2004. Approximately 78 % ofthe total investment will come from the private sector, allotted to build new hydroelectric and thermoelectric plants, emergency units and new power lines throughout Brazil, the largest South American country, with an area of 8.5 mm sq km (5.28 mm square miles).
"There is no danger that what happened in 2001 will happen again," Vasconcellos told.

The rationing program forced most of the country's factories, businesses and homes to reduce their energy consumption by 20 %, changing the schedules and daily habits of most Brazilians. Some analysts became concerned that the energy crisis, along with the economic collapse in neighbouring Argentina, would drive Brazil over the precipice.
But, according to the Finance Ministry, the negative effects were less than expected, as demonstrated in the country's gross domestic product (GDP), which saw 2.5 % growth in 2001, not far short of the 4 % increase initially forecast.

Source: Efe
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