Aug 1, 2014

• Valid for three years, the memorandum establishes an exchange of information on potential projects and possible financing mechanisms

On August 1, 2014, the Brazilian Development Bank (BNDES) and the Japan Bank for International Cooperation (JBIC) signed a Memorandum of Understanding focused on small and medium-sized enterprises.  The document was signed by the BNDES’ president Luciano Coutinho and the vice-president of the Japanese institution, Koichi Yajima. This took place during the official visit of Japanese Prime Minister Shinzo Abe to Brazil.

The memorandum aims at identifying potential investment projects for small and medium-sized Japanese enterprises (MSE) in Brazil, being conducted directly or in partnership with local enterprises and which are of interest to the two countries.  If made possible, these investments may pave the way to expanding economic relations between the countries. Potential areas for partnerships include technology and innovation, both of which Japan has a high level of development. 

Support may be offered through financing and co-financing, or two-step loans and projects may receive support from both institutions, within the limits of their operational policies. To receive BNDES financing, enterprises must be set up in the country, establishing their size classification based on their gross operational earnings.
    
Valid for three years, the agreement also establishes an exchange of information on potential projects of mutual interest, as well as the organization, in both countries, of seminars and meetings to discuss the investment environment in Brazil and possible financing mechanisms. 

Background – The institutional relationship between the BNDES and JBIC dates back to 1962, when the first loan contract was signed with the Export-Import Bank of Japan (JEXIM), JBIC’s predecessor. Since then, the finance institutions have already signed 15 loan contracts, and the last one was in April, amounting to US$ 300 million.  
 
The April operation, which included another Japanese bank – Mizuho Bank, Ltd. – was carried out within the scope of the GREEN (Global Action for Reconciling Economic Growth and Environmental Preservation) line, whose aim is to support projects that favor environment preservation, promoting the reduction of greenhouse gas emissions, energy efficiency and power generation from renewable sources.
 
The BNDES and JBIC also cooperate closely within the scope of the Wise-Men Group on the Japan-Brazil Strategic Economic Partnership, a forum that focuses on discussing proposals to foster the strategic economic partnership between the two countries. Among the Group’s proposals are the intensification of technology levels and investments in innovation as the priority area to foster economical interaction between both countries. Today, President Coutinho and Mr. Yajima are, respectively, the representatives for the BNDES and JBIC in the Wise-Men Group.