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Brazil's federal government is preparing up to US$20bn in local infrastructure projects backed by the Chinese government, the Brazilian authorities said in a release.
Following a visit to China by a Brazilian delegation led by President Michel Temer in September (pictured), government officials from both countries signed a memorandum of understanding this week that establishes basic guidelines for a bilateral cooperation fund.
The money will be used to improve Brazil's industrial production capacity and facilitate cooperative efforts between the two countries. While US$5bn in capital is to be provided by Brazil, the remaining US$15bn will be provided by China, according to the release.
The funding will help improve Brazil's infrastructure, namely transportation logistics, warehousing, energy, mining, IT, and agriculture and, in turn, China will benefit through additional contracts for Chinese companies such as China Railway Construction Corporation (CRCC), interest on financing provided and graeter efficiency in exports from Brazil.
According to planning minister Dyogo Oliveira, Brazil's funding will come from national development bank BNDES, the FI-FGTS investment fund of federal bank Caixa Econômico Federal and the private sector, the release read.
The money may be provided in the form of equity investments, debt investments, and funds, among others.
Pictured, from left, Brazil's foreign relations minister José Serra, finance minister Henrique Meirelles, and President Michel Temer, along with China's President Xi Jinping.