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Brazil approves US$4.5bn urban infrastructure financing

Bnamericas Published: Monday, June 09, 2014
Brazil approves US$4.5bn urban infrastructure financing

Brazil's unemployment insurance fund FGTS reassigned 10bn reais (US$4.45bn) in debt from federal savings bank Caixa Econômica Federal (Caixa) to finance waterworks, housing and urban mobility projects throughout the country.

Caixa will therefore be able to finance more operations without the need for contributions from the national treasury, the federal government said in a release.

According to the fund's trustee board, financing should only go towards FGTS activities. Caixa must inform the board of all contracts made.

This is the fourth time that FGTS authorizes such a transaction. Caixa's overall debt with FGTS is more than 150bn reais.

FGTS FOUR-YEAR PLAN

At end-2012, the federal government's plan for FGTS funding projected a total of 240bn reais for waterworks, housing and urban mobility works between 2014-16.

In October 2013, some 81.6bn reais of FGTS financing was committed to financing urban projects infrastructure in 2014 alone, up 14.7% from the 71.1bn reais earmarked for 2013.

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