Page 91 - InvestmentGuideBrasilEng

Financing

The Brazilian Development Bank (BNDES) is a specific rules. Among the bank/s products
state-owned bank that is a key instrument in is BNDES Project Finance, earmarked for the
Brazilian economic development. The BNDES financial structuring of investment projects
mandate is to foster sustainable, competitive de- and contractually supported by project cash
velopment in the Brazilian economy and support flow. Assets and receivables (asset-backed) may
job creation while contributing to a reduction in serve as guarantees for the same undertaking.
social and regional inequality. Additionally, the BNDES offers financing
The BNDES is the main financing agent for programs of a transitional nature, which are
development in Brazil. Since its foundation in focused on a particular economic segment. The
1952, the BNDES has played a fundamental role in Bank also administers some funds, which are
stimulating the expansion of industry and infra- resources to support specific activity sectors.
structure in the country. Over the course of the
Bank’s history, its operations have evolved in ac- ? Non-repayable Funds - investments of a
cordance with socio-economic challenges. They social, cultural (educational and research),
now include support for exports, technological environmental, scientific or technological
innovation, sustainable socio-environmental de- nature, which need not be repaid to the BNDES.
velopment and the modernization of public ad-
ministration. ? Subscription of Securities - the
The Bank offers several financial support BNDES may participate as a subscriber of
mechanisms to private companies of all sizes with securities - i.e., shares, simple debentures,
headquarters and administration in Brazil, as well convertible debentures, subscription bonds,
as individual entrepreneurs, enabling investments options and other derivative products, in
SUPPORT provide financial support to a company or project, (receivables) investment funds (FIDC) - in
addition to participation in asset-backed
in all economic sectors. In analyzing whether to
publicly-listed companies, in public or
the BNDES emphasizes three factors it considers
private issuances, or in companies that
strategic: innovation, local development and so-
may join the capital market in the short or
cio-environmental development.
The BNDES can provide financial support to
MECHANISMS companies established in Brazil through three medium term, through a private issuance.
In some specific cases, financial support may
mechanisms:
be provided in a mixed manner by means of fi-
? Financing – earmarked for investment
nancing for a part of a project and through the
projects, one-off purchases of new machinery
subscription of securities for another part of it.
FOR BUSINESS and equipment, exports of machinery, Brazilian bndes_en/
http://www.bndes.gov.br/SiteBNDES/bndes/
equipment and services and the acquisition
In addition to the BNDES, several interna-
of goods and production inputs. Financing
tional, national and regional commercial banks
modalities are divided into products, according to
operate in the Brazil, providing financing lines to
the purpose of the undertaking. These products
define the general rules of applicable financial
conditions and the operating procedures for companies and investors. Most of these banks are
organized under the Brazilian Banking Associa-
financing. Some products are considered tion (FEBRABAN).
financing lines, aimed at certain clients, sectors http://www.febraban.org.br/Febraban.asp
and undertakings and, therefore, have more
90 91