Evaluation of the impact of FDNE financing on the construction of wind farms and its effects on the labor market and economic indicators of municipalities in Sudene's area of operation

Abstract

In 2023, Brazil ranked sixth globally in installed capacity for onshore wind energy, with the Northeast leading production, accounting for 91.52% of the country’s wind potential. Wind energy not only provides economic benefits but also fosters local and regional development. This study aimed to analyze the causal impacts of wind farm deployment in Northeastern municipalities benefiting from FDNE, focusing on the labor market and economic indicators such as per capita GDP and Gross Value Added (GVA) in the agricultural, services, and industrial sectors. Using data from 1999 to 2022 and employing the Difference-in-Differences (DiD) model, the results show that the construction of wind farms significantly increased employment, per capita GDP, and GVA in the industrial and services sectors, while causing temporary negative impacts on the agricultural sector, which dissipated after the completion of the wind farms.