Brazil: BNDES fishes for funds
The Brazilian National Development Bank (BNDES), is fishing for extra funds after recalculating its plans and projecting that it will lend as much as 15% more than expected for the 2008-11 period, as it seeks to step up its investments in infrastructure. BNDES president Luciano Coutinho has been talking about growth of 10% in lending for infrastructure projects, focused on energy, communications, railways, ports, and water and sanitation. The bank has already announced that it needs an extra R$25 billion ($14 billion) for next year, prompting speculation about how the money will be found.
Some funding is likely to come from the Brazilian treasury, the majority owner of the Rio de Janeiro institution. Finance minister Guido Mantega has said that additional funding for BNDES might come in the guise of a sovereign fund, although he has not provided details on just what this would look like, and he has already scotched rumours that the treasury would divert some $4 billion to $5 billion of its international reserves to fund the bank’s spending spree.
Much of the need for the hefty step-up in lending comes from growing government pressure on BNDES to bankroll its ambitious infrastructure development plans.