Why Brazil’s BNDES is investing in international partnerships and agreements

Brazilian development bank BNDES is investing in partnerships and agreements with international institutions to foster projects that promote sustainability, the green transition, the diversification of the energy matrix and the development of energy infrastructure, the lender’s press office told BNamericas. 

The initiatives involve co-financing, project structuring, guarantees, green finance, blockchain, capital markets and strategic areas for development, infrastructure projects, urban mobility, export support and sustainable and innovative investments.

BNDES' international partnerships and agreements  

According to the bank, international partnerships and agreements favor not only the raising of financial resources, but also the expansion of technical knowledge and the exchange of experiences with other organizations and countries, as well as fostering synergies and international cooperation.

BNDES said that it has been trying to position itself as an articulator between the raising of funds from various sources and their application in investments and projects of public interest. 

“The bank has been seeking to expand these partnerships for sustainable development through different instruments, such as financing, guarantees, investment funds, matchfundings, as well as public notices, calls and awards,” the press office said. 

CASE

At the beginning of July, BNDES reported that it had approved 3.2bn reais (US$580mn) for projects under the Rotas para integração (Routes to integration) infrastructure initiative.

Rotas is the largest fund ever built for the integration of South America and trade bloc Mercosur, whose other full members are Argentina, Paraguay and Uruguay.

The Rotas initiative was signed in December 2023 and involves investments of up to 50bn reais, with resources from BNDES, the Inter-American Development Bank (IDB), Latin American development bank CAF and La Plata basin development bank Fonplata. 

BNDES may use 15bn reais from the fund for investments in Brazilian companies, of which it has disbursed 2bn reais so far.

The lender supports 29 projects in Brazil in the areas of highway project financing and structuring, rail network expansion and cargo transport equipment acquisition, airport expansions, and energy investments in Pará state.

GROWTH

On Thursday, BNDES announced it is projecting accelerated loan growth for this year due to strong first half figures.

"We increased loan approvals by 79%, which is a spectacular evolution considering that interest rates in Brazil remain very high. We had 21% higher disbursements, which was also very strong in terms of disbursements," BNDES president Aloizio Mercadante said in a statement without specifying a timeframe.

Mercadante believes that the faster loan growth could have a positive impact on the economy.

"The data is very strong, which makes me think that the finance ministry will have to review the economic growth projection for this year. Through BNDES, we will have greater growth than what is projected so far," said Mercadante.