Brazil state banks to fund infrastructure projects

Aug 25 State-controlled Brazilian lenders BNDES and Caixa Econômica Federal SA plan to extend funding to private investors who win licenses for port, energy and other infrastructure projects, including stakes in offshore oil finds, newspaper O Estado de S. Paulo reported on Thursday.

The planned auctions, which could be Brazil’s most ambitious privatization drive in two decades, offer more evidence of a policy shift since the Senate’s decision in May to suspend President Dilma Rousseff and try her on charges of breaking budgetary rules.

According to Estado, executives at Brasilia-based Caixa Econômica are looking at ways to use savings from workers’ severance in the so-called FI-FGTS fund to finance some of those projects. About 13.1 billion reais ($4.1 billion) could be used from FI-FGTS and another investment vehicle, the newspaper added.

Unlike prior plans, the government will not determine internal rates of return on the projects, Wellington Moreira Franco, Brazil’s secretary for infrastructure partnerships, told Estado. The plan will also include rules to discourage the formation of so-called cartels colluding to win better terms during the auctions, Estado said.

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