BNDES announces US$ 555.6 million line to finance hotels
Folha de S. Paulo
After the pressure from businessmen and from the Ministry of Tourism, the BNDES (National Development Bank) launched yesterday a credit line for the construction and improvement of hotels with conditions considered "generous" by the bank. The purpose is to meet the demands of the organization of the 2014 FIFA World Cup and the 2016 Olympics.
The provision is R$ 1 billion (US$ 555.6 million), but Élvio Gaspar, Director of the BNDES, said it may be increased, depending on the demand. The interest rate is the second lowest one of the bank, affirmed Gaspar - only above that for academic projects of innovation. The deadline for paying off is the same given to large and complex works, such as hydroelectric power plants and railroads. The hotel chain is the main problem of the organization of the 2016 Olympic Games, in Rio. The host city has a shortage of 12 thousand rooms - 28 thousand less rooms than the 40 thousand needed.
According to Alfredo Lopes, President of Rio de Janeiro section of the Brazilian Association of the Hotel Industry, the line already meets the financing needs for the Olympics. The estimate is to create 20 thousand new rooms in town by 2016. This way, it would not be necessary to make use of ships, as offered in the project of application to host the games.
The interest rate ranges from 6.9% to 7.8% plus the risk rate, which depends on the profile of the borrower of the credit. The bank already had a credit line aimed at the sector, but with shorter pay-off deadlines. It has changed from a six to eight year period to a ten to 18 year one. The minimum value for the operation also fell from R$ 10 million (US$ 5.56 million) to R$ 3 million (US$ 1.7 million) in the host cities. The level of participation in the funding of the undertaking has increased from 60% to 80%.
The FIFA requires that the country offer 55 thousand rooms. In the host cities, the number of rooms should represent 20% of the total seats in the stadium. Cities up to 50 km of the host cities can also be used in the calculation. The final date for submission of projects is December 31, 2012. According to the association of hotels, an establishment of this kind takes three years to be ready.