Brazil's Banco do Nordeste plans record infrastructure loans

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Monday, November 28, 2016

Brazil's Banco do Nordeste is expected to grant a record amount of infrastructure loans next year.

According to local daily Folha de S.Paulo, the financial institution plans to disburse 6.3bn reais (US$1.86bn) in financing for concessions to operate airports, water and sanitation facilities, and wind farms.

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Of that total, 2.2bn reais have been allotted to energy projects that have already won auctions. The concessionaires will require a total of 7bn reais, and the remainder will come from other institutions like development bank BNDES.

"Up until 2012, we worked with energy a lot," said Banco do Nordeste's superintendent of development policies Francisco José Bezerra. "At that time, BNDES was not active in that market. That was when the government said that the bank should reposition itself and prioritize small companies."

The vice president of federal savings bank Caixa Econômica Federal, Paulo Galli, said on Monday that the government is taking the steps necessary to create conditions for banks in Brazil to improve the financing of infrastructure projects.

Speaking at an event hosted by business daily Valor Econômico, he noted that both Caixa and BNDES have been discussing their roles in financing infrastructure projects. Caixa, Galli said, acts as both a funding provider and a financial agent.

In the last five years, Caixa has created an infrastructure financing portfolio worth 78bn reais, with 31% going to sanitation projects and the same rate going to energy.