BNDES’s project finance revolution
Plans to incentivize foreign capital aim to boost capacity, with a new internal ‘investment bank’ to drive growing pipeline.
Since Gustavo Montezano, president of BNDES, took over at the state-owned development bank in 2019, it has been evolving its role from a central provider of funding for the country’s infrastructure projects to an advisory role that brings in private finance.
One of the key reforms was the introduction of non-recourse financing in Brazil, which made project finance attractive for international companies. The bank is working with the Brazilian government to improve the financial environment for foreign investment in the country’s expanding infrastructure industry.
BNDES is now going further – it has created its own group, which Montezano, speaking to Euromoney in São Paulo, refers to as BNDES’s internal “investment bank”. Its official name is the Fábrica de Projetos – or Project Factory.
“When I joined BNDES there was a clear lack of projects in the Brazilian pipeline and, as of today, there still aren’t enormous Brazilian infrastructure opportunities, but it’s improving," says Montezano. "We are quickly catching up with Chile, Colombia, Mexico and Peru.”
In recent years there has been solid progress: in 2021 alone, 108 infrastructure projects were delivered – more than in 2020 and 2019 – and 39 assets were granted to the private sector worth R$160 billion ($34 billion), according to data from the Ministry of Infrastructure.