Dec 18, 2013

• Changes should stimulate partnerships with the private credit market

The Brazilian Development Bank (BNDES) has revised its financing conditions. In conjunction with the renewal of the BNDES’ Investment Maintenance Program (BNDES PSI), the new rules are in compliance with the Bank’s main guidelines, which aim at boosting investment, but they will also foster synergy with the government's priorities, promoting a swifter and more simplified approach.

The BNDES redefined its operational policies, which are rules that govern the financing conditions for projects, such as interest rates and level of participation. Full details of the new rules should be released in January 2014.

In general, priority sectors will face lower financial costs and have higher levels of the Bank’s participation. The BNDES not only adjusted its maximum level of financing to encourage the inclusion of other sources of funding, but also expanded the use of market resources in financing and opened up more possibilities for co-financing in projects together with the private financial system through the use of debentures.

In the area of infrastructure, the utmost conditions are offered to logistics and energy infrastructure, with reduced financial costs and higher levels of participation. Similar conditions are available in the areas of sanitation and urban mobility, as well as for projects to modernize public administration.

In the industrial area, priorities include the production of capital goods, engineering- and knowledge-intensive sectors, as well as the product creation economy. In addition, priority will be given to efforts in the area of innovation, technical and technological services, as well as export support operations. Projects related to the environment, production and social inclusion, in addition to companies’ social actions will also be provided with the Bank’s most advantageous conditions.

Another highlight of the operational policies is that entrepreneurs will have more favorable conditions provided that they adopt sustainability standards in their projects (such as energy efficiency certifications), or that the undertakings are carried out in regions that are less developed.

Finally, the new financing rules will amplify the BNDES’ priority for micro, small and medium-sized enterprises. For MSMEs, the maximum level of support from the BNDES will always be higher than that provided to large companies and may reach 90%, and even up to 100% in the BNDES PSI.

BNDES PSI – The BNDES’ instrument for providing support to investments is still the BNDES PSI, which has been renewed and given an extension until the end of 2014. The program’s most favorable conditions are still for innovation, only 4% a year.
The program’s priority for micro, small and medium-sized enterprises is patently clear when looking at the conditions offered to acquire machinery and equipment: a rate of 4.5% and level of participation up to 100%. For large companies, the rate is 6% and the maximum participation level is 80%.