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 this.
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.
About IFC
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
.
About BNDES
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.
About IADB
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
and www.iadb.org/infrafund.
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