Brazil to boost infrastructure financing to $4.1bn
BNDES plans to provide BRL20 billion ($4.1 billion) in funds for infrastructure projects this year, two-thirds more than in 2022 and mostly through the purchase of local debt issued by companies that invest in the sector.
The strategy is aimed at encouraging private investors to join in the purchase of infrastructure bonds, increasing the impact of financing by BNDES, according to Felipe Borim Villen, deputy managing director of infrastructure at the bank.
The bank has disbursed about BRL12 billion for infrastructure projects by August, the same amount provided during all of 2022. About 60% of the funds were used in the purchase of infrastructure bonds in sanitation, transportation and logistics, according to Villen.
One of the operations helped Igua, one of the largest sanitation companies in Brazil, to obtain BRL3.8 billion through the issuance of local infrastructure bonds maturing in 20 and 29 years. BNDES purchased BRL1.8 billion of the offer.
The bank has also scooped up debt from companies that need extra funds to conclude concession projects whose costs jumped along with a post-pandemic increase in raw materials prices. In one of them, a road concession in the state of Minas Gerais, BNDES took 60% of a BRL520 million issuance.
The bank is also ready to help road concession companies that have been unable to honor contracts. One-third of the 14,000km (8,700 miles) of roads in the hands of the private sector are currently operated by companies facing financial problems, according to transportation ministry data.
