Washington, D.C., October 19, 2007—IFC,
the Inter-American Development Bank, and the Brazilian National Development
Bank today signed an agreement to boost infrastructure investments in Brazil.
A $3.99 million private sector participation trust fund will be designed
to develop and tender infrastructure projects in the country, generally
public-private partnerships. The initiative will bring together the
technical expertise and financial support of the three institutions.
Developing infrastructure is a high priority for Brazil and an area where
more investment is needed to increase the country’s competitiveness and
improve people’s lives. Compared to other sectors, investments in infrastructure
have dropped significantly, from around 4 percent of GDP in the 1980s to
less than 1.5 percent today. Involving the private sector in infrastructure
development projects is one of the most effective approaches to bridging
The private sector participation program is expected to structure and launch
14 projects in its first four years, helping mobilize over $1 billion in
investments. Initial contributions amount to $4 million, of which IFC and
IADB are providing $1 million each and BNDES is providing $2 million. Additional
contributions of $16 million are expected.
The program was launched today at a ceremony attended by Lars Thunell,
IFC Executive Vice President and CEO; Luciano Coutinho, President of BNDES;
and Otaviano Canuto, Vice President for Countries.. An example of successful
teamwork, the program will combine IFC’s global experience in structuring
infrastructure projects for governments with BNDES’ understanding of local
needs and IADB’s regional knowledge.
The program is part of the LAC Infrastructure Facility, which is
supported by the U.S. Treasury. It will be managed by IFC Advisory Services.
IFC, a member of the World Bank Group, fosters sustainable economic growth
in developing countries by financing private sector investment, mobilizing
private capital in local and international financial markets, and providing
advisory and risk mitigation services to businesses and governments. IFC’s
vision is that poor people have the opportunity to escape poverty and improve
their lives. In FY07, IFC committed $8.2 billion and mobilized an additional
$3.9 billion through loan participations and structured finance for 299
investments in 69 developing countries. IFC also provided advisory services
in 97 countries. For more information, visit www.ifc.org.
BNDES is a federal public company associated with the Ministry of Development,
Industry and Foreign Trade. BNDES's mission is to promote Brazil's development
by boosting the Brazilian economy's competitiveness, prioritizing the reduction
of both social and regional inequalities, and maintaining and creating
employment opportunities. Its main activity is to provide long-term financing
for endeavors that contribute to the country's development, improving the
competitiveness of the Brazilian economy as well as the quality of life
of its population. BNDES also seeks to strengthen the capital structure
of private companies, the development of capital markets, the trading of
machines and equipment and the financing of exports.
With assets in excess of $66 billion dollars, the Inter-American Development
Bank is the oldest and largest regional development institution in the
world and the main source of multilateral financing for economic, social
and institutional development projects as well as trade and regional integration
programs in Latin America and the Caribbean. The IDB’s InfraFund, which
will provide the resources for the Brazilian PSP Program, is a project
preparation fund aimed at catalyzing critical infrastructure projects in
the region, as part of the Bank’s effort to lend $12 billion in this sector
in 2006-2010. For more information, visit www.iadb.org