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NDB to increase Brazil infrastructure loans

Bnamericas Published: Thursday, October 15, 2020
NDB to increase Brazil infrastructure loans

The New Development Bank (NDB) is planning to provide more infrastructure loans to Brazil. 

"Currently, the volume of financing approved for projects in Brazil is US$2.6bn, and we can reach US$4bn by the end of this year, although it is highly probable that amount will be even higher, as there are certain relevant operations in advanced stages of evaluation by us," Claudia Prates, NDB’s head of Brazilian operations told BNamericas. 

NDB was founded by the so-called BRICS countries – Brazil, Russia, India, China and South Africa – and became fully operational in 2016.

Although the bank approved this year US$1bn financing to support the government’s coronavoucher program that helps informal employees during the pandemic, the long-term focus is on infrastructure, Prates said.

"Brazil is a country with needs in various infrastructure segments, so it is not possible to determine a segment that will be our focus. But, at this point I can say that we likely expand our actions in the sanitation and urban mobility segments, as we still don’t have much participation in these areas," added Prates. 

Of all founding members, Brazil has received just 12% of NDB loans, compared to India receiving 31.1%, China 24.6%, South Africa 17.4% and Russia 14.9%.

"The share of Brazil is still the lowest of the bank’s operation because our office in Brazil was opened last year. So, in the coming months we likely see an increase in the participation of loans for projects here," Prates said.

According to the executive, the bank seeks to be more active in project finance and is aiming to also loan directly to infrastructure-focused companies and investment funds.

"When we are talking about infrastructure we are not only talking about the construction stage. We want to support the financing of those projects that carry a strong element of innovation, in terms of technology and process applied," Marcos Thadeu Abicalil, an NDB senior executive told BNamericas. 

PARTICIPATION OF LATAM COUNTRIES 

The bank also seeks to strengthen relations with other Latin American countries. 

"One of the ideas of the bank is to attract new country members as shareholders of the bank, and before the pandemic NDB was in talks with countries in Latin America and in Asia regarding that, but the process was delayed due to the pandemic," said Prates.

The executive said the bank is in talks with two Latin American countries, but refused to say which ones.

Each of the bank’s founding countries holds a 20% share. According to the bank's rules, all members of the UN could also become members of the bank, although BRICS countries will always hold a combined share of at least 55%.

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