Sao Paulo, Brazil, June 18, 2010
—IFC, a member of the World Bank Group, today announced that it will invest up to $47 million in the low-income housing subsidiary of Brookfield Incorporações S.A. to increase the availability of high-quality housing for low-income people in Brazil.
IFC’s investment includes a $30 million long-term revolving line of credit and up to $17 million in equity, which will represent approximately 10% of Brookfield subsidiary’s shares. The project is consistent with the federal government’s Minha Casa Minha Vida program that aims to reduce the national housing deficit by stimulating the Brazilian construction industry. This will be IFC’s first investment in Brazil’s housing construction sector.
“The partnership with IFC supports our strategic expansion to selected new markets and segments,” said Nicholas Reade, Brookfield’s CEO. “IFC’s investment will help Brookfield increase the supply of affordable entry-level lower-income houses in Brazil, helping reduce the country’s housing deficit.”
The rising demand for housing in Brazil, combined with a steady growth in jobs, is contributing to a healthy homebuilding sector. Brookfield specializes in an integrated approach to housing development with increased availability of amenities and community integration, characteristics not usually available to low-income families. It is estimated that there is a deficit of 8 million houses in urban areas in Brazil.
Additionally, the housing advancements will contribute to urban infrastructure development in the area.
IFC will provide local currency long-term revolving credit facility, not currently available to homebuilders by local banks. To date, IFC has invested around $40 million to support the growth of Brazil’s housing finance sector, facilitating access to mortgages for low-income families.
“IFC’s investment in Brookfield’s low-income subsidiary is in line with our strategy to address the housing needs for low-income people in Brazil. We look forward to a long-term partnership with a key player committed to Brazil’s sustainable development and to the promotion of better quality of life for low-income Brazilians,” said Andrew Gunther, IFC Country Manager for Brazil.
IFC’s strategy in Brazil focuses on promoting access to finance and developing capital markets to reach low-income individuals, microenterprises, and small businesses. IFC seeks to strengthen infrastructure and public services, including health and education, by increasing private sector participation. Other key areas include improving the investment climate and helping small businesses join the formal economy. IFC also promotes socially and environmentally sustainable practices, specifically in the Amazon region. As of June 2009, IFC’s committed portfolio in Brazil was $2.2 billion.
About IFC
IFC, a member of the World Bank Group, creates opportunity for people to escape poverty and improve their lives. We foster sustainable economic growth in developing countries by supporting private sector development, mobilizing capital for private enterprise, and providing advisory and risk mitigation services to businesses and governments. Our new investments totaled $14.5 billion in fiscal 2009, helping channel capital into developing countries during the financial crisis. For more information, visit
www.ifc.org
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About Brookfield Incorporações
Brookfield Incorporações S.A. (Bovespa: BISA3) is the result of the combination of three strong companies: Brascan Residential Properties S.A., Company S.A. and MB Engenharia S.A. The company is one of the leading integrated developers in Brazil’s real estate market, with operations that include land acquisitions, planning, development, construction of own and third-party projects, sales, and customer service. For more information, visit
http://www.br.brookfield.com /
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