The funds have been earmarked for Força Eólica do Brasil, a joint venture between Spanish utility Iberdrola and Brazilian power company Neoenergia, which is 39% owned by Iberdrola. The joint venture will invest a total of R$ 594.5 million (US$286 million) building five wind farms across the two states.

The projects are to be built in the municipalities of Caetité, in the state of Bahia, and Bodó, Santana do Matos and Lagoa Nova, in the state of Rio Grande do Norte. The five wind farms are part of a larger project, consisting of five more wind farms in the vicinity.

Earlier this year Iberdrola said it wanted to sell its stake in Neoenergia, in an effort to comply with new Spanish accounting rules. The company is rumoured to be in discussions to sell the stake to the Chinese State Grid, a move which is likely to be opposed by the Brazilian government. Neoenergia is currently owned by state pension fund Previ, and state bank Banco do Brasil.

According to the Brazilian Wind Power trade association, Brazil had approximately 1.5 GW of installed capacity by the end of 2011, with another 7 GW in the pipeline for 2016. The sector has attracted about $18 billion in investment, the association said, with projections for cumulative installed capacity in 2020 reaching more than 15 GW.

BNDES’ current portfolio amounts to 107 wind farms, representing a total investment of R$ 12.4 billion ($5.98 billion), of which R$ 8.4 billion ($4.5 billion) was financed by the bank. In 2011, the it lent R$ 3.4 billion (1.6 billion) to the renewables sector, financing 1.16 GW of installed capacity, BNDES said.