China mulls financing multi-billion dollar railway project in Brazil

As part of its plan to increase trade relations with Brazil, China has expressed its openness to finance billion dollar projects, especially those aimed at improving railroad infrastructure to help support the growth of manufacturing and commodities production.

Production and manufacturing needs a boost in Brazil, and to achieve this, better logistics and transportation is needed, China's vice president Li Yuanchao said during a meeting with Brazil's vice president Michel Temer last week in Beijing, local financial daily Valor Econômico reported.

China Development Bank (CDB) has specifically set its sights on the Cuiabá-Santarém railroad, the report said, claiming that a bank representative recently extended his temporary visa for a period of one year in order to work on preparing for the financing of projects.

According to China's vice president, the country can provide financing in exchange for an interest in the financed product or commodity, Temer said in the report, pointing out oil and gas as other potential sectors of interest.

To guarantee a supply of commodities coming from the country, China already has a similar type of agreement with Venezuela.

CUIABÁ-SANTARÉM RAILROAD

The Cuiabá-Santarém railroad runs between Mato Grosso state capital Cuiabá in the midwest to Santarém port in the northern state of Pará. It was given an estimate of 10bn reais (US$4.32bn) in 2011.

China National Machinery Import & Export Corporation (CMC) and Asian Trade & Investments (ATI) have shown interest in the project.