Brazil Boosts BNDES Lending Capacity by $20.7 Billion

April 30 (Bloomberg) -- Brazil’s state development bank will have an additional 36 billion reais ($20.7 billion) to lend under a plan announced by the Treasury today.
Brazil’s Treasury will exchange 1.3 billion reais of shares it owns in Centrais Eletricas Brasileiras SA, a state-controlled power utility, for shares in state-controlled Banco do Brasil SA owned by development bank known as BNDES, said Charles Guedes, a Treasury official. The Treasury will also transfer to the bank a credit of 2.7 billion reais owed to it by Eletrobras, as Latin America’s biggest utility is known.
The two measures will boost capital levels at the development bank, giving it more room to make loans. BNDES can include the Eletrobras shares as part of its capital, while rules didn’t allow shares in Banco do Brasil to be counted as capital.

Today’s measures take advantage of new rules announced April 26 by the Treasury to give the government more flexibility to manage its holdings in state-controlled companies and banks.
Brazil’s government is injecting funds into the Rio de Janeiro-based BNDES to fund large infrastructure spending such as the $11 billion Belo Monte hydroelectric dam in the Amazon and the Growth Acceleration Program, known as PAC. BNDES intends to loan 126 billion reais this year, bank President Luciano Coutinho said in January.
BNDES boosted lending to a record last year to ease the credit crisis on Latin America’s biggest economy.
The bank sets its rates based on Brazil’s 6 percent TJLP, or long-term rate, while the central bank’s 9.50 percent benchmark Selic rate is the benchmark for other loans in the economy.
To contact the reporter on this story: Andre Soliani Costa in Brasilia at asoliani@bloomberg.net
Last Updated: April 30, 2010 17:40 EDT

Brazil Boosts BNDES Lending Capacity by $20.7 Billion (Update1) - Bloomberg.com