Government releases US$ 2.2 billion for loans via BNDES
Folha de S. Paulo - 01/16/2009
Yesterday, the Federal Government authorized, for the first time this year, a release of funds for the BNDES (Brazilian Development Bank). The authorized amount to fatten the bank budget was R$ 5 billion (US$ 2.2 billion), which is equivalent to less than 5% of the total amount the Government intends to use to finance companies by means of the public bank. The President of the BNDES, Luciano Coutinho, said in an interview to Folha at the end of last year that his goal is to lend more than R$ 100 billion (US$ 43.5 billion) in 2009. To reach the goal, the institution will need help from the Federal Government to increase its budget. Asked about it, the BNDES did not tell how much it already has available for financings. The funds released yesterday are part of a total amount of R$ 15 billion (US$ 6.5 billion) approved by the Congress in November of last year, when the financial crisis made it more difficult for the companies to have credit and, consequently, increased the demand for loans in the bank. The rest of the money has already been delivered to the BNDES. Pursuant to the law, the funds came from a fund raising of the National Treasury, by means of the issuance of Federal Government Securities. The BNDES must pay the Government interests equivalent to the cost of the raising. The funds are, therefore, considered a loan from the Federal Government to the public bank. Since the end of last year, the Federal Government has already released R$ 46 billion (US$ 20 billion) to the development bank.