Brazil's state-run banks up financing for public projects in 2023

Brazil's state-run banks are projected to have provided a total of 56.4bn reais (US$11.5bn) in financing for projects in states and municipalities in full-year 2023, the first year of President Luiz Inácio Lula da Silva's government.

That figure was larger than for the previous four years combined and makes the public banking sector the leader in providing finance ahead of the private sector, highlighting the government's strategy of having much greater state bank involvement in financing public projects.

The financing was provided by development bank BNDES, Caixa Econômica Federal and Banco do Brasil.

Of the total amount, 32.1bn reais was earmarked to support public projects in 16 different states, while 24.3bn reais was provided for initiatives in 805 cities across the country.

The water and sanitation sector received the largest slice of the financing, with 15bn reais, followed by urban mobility with 13.2bn reais and urban infrastructure with 10.1bn reais.

MINAS GERAIS STATE

Separately, the federal government authorized Minas Gerais state development bank BDMG to raise up to US$100mn with the Inter-American Development Bank (IDB).

These funds will be used for decarbonization and climate resilience of the credit portfolio, a program structured by BDMG with the IDB to finance companies of all sizes and municipalities interested in investing in projects related to sustainability, the Minas Gerais government said in a statement.