SAO PAULO, July 21 (Reuters) - Brazilian state development bank BNDES and a pool of commercial lenders could extend an additional 6.5 billion reais ($2.9 billion) in emergency credit to electricity distributors as drought causes power rates to soar, newspaper O Estado de S. Paulo said on Monday.
BNDES, the main source of long-term corporate credit in Brazil, would disburse 3 billion reais to the CCEE, the country's spot market electricity clearinghouse, with the rest coming from a group of 10 banks, Estado said, citing unnamed sources.
New financing for Brazil's ailing power companies is coming as cash from a 11.2-billion-real credit extended in April ran out recently. Reuters reported this month that another loan was already under discussion.
Neither BNDES nor Mines and Energy Ministry officials were immediately available for comment.
Brazil's electricity sector is grappling with soaring spot power costs amid the driest start of a year in decades and the government's reluctance to increase rates before the October presidential election.
A drought has reduced the power available from hydroelectric dams, which is normally responsible for about 70 percent of the country's electricity, against a backdrop of rising demand. Distributors have had to buy spot market power, much of it generated by expensive natural gas or fuel oil, to meet demand.
The loan would go to the CCEE, a privately held entity in charge of buying and selling electricity in the spot market, which would subsequently funnel money into the coffers of Brazilian power distributors, Estado reported.
The group of banks that participated in the prior deal includes Banco Bradesco SA ; Itaú Unibanco Holding SA ; Banco Santander Brasil SA ; Grupo BTG Pactual SA ; Citigroup Inc ; JPMorgan Chase & Co ; Credit Suisse Group AG ; Bank of America Corp and state-run lenders Banco do Brasil SA and Caixa Econômica Federal SA.
In the prior deal, banks pegged the debt to receivables linked to utility bills, with repayment scheduled to begin as early as next year.
None of the lenders had an immediate comment on the Estado story.
($1 = 2.23 Brazilian reais) (Reporting by Guillermo Parra-Bernal; Editing by Lisa Von Ahn)