Brazil’s President Michel Temer has passed a law allowing foreign companies in a multitude of sectors to receive funds from publicly-owned banks for their operations in the country.
The decree will allow Brazil’s development bank BNDES in particular to provide financing to non-Brazilian companies involved in Brazilian projects. It is hoped that the unlocking of BNDES support will encourage foreign and private lenders to get involved in the large infrastructure developments Brazil needs to ensure long-term growth.
The announcement follows BNDES’ publication of its new policies, meant to focus more on individual projects’ benefits than in the past.
With the move, Temer amends a 1962 law listing a few sectors “of high national interest”, for which public funds could exceptionally be allocated to foreign firms. The list now includes infrastructure in telecommunications, ports and transportation, environment and sanitation, as well as petrochemical, mineral and agricultural industrial complexes. Information and communication technologies, oil and gas, healthcare, textiles, education services, energy efficiency services and the commerce sector have also been added.
The initiative has been criticised by government opponents, who argue that Temer is cutting public spending on social measures – including a controversial pension reform – but willing to give the country’s money to non-Brazilian firms.
But according to local sources speaking on condition of anonymity to GTR, the administration is only trying to “untangle legislation” to make Brazil more attractive to foreign investors and allow easier financing of infrastructure projects.