Guido Mantega, the Brazilian minister of Finance, announced this Thursday, January 22, that the National Treasury is going to inject 100 billion reais (US$ 42.2 billion) into the Brazilian Development Bank (BNDES).
The capital is going to fund projects in the sectors of gas, oil, electric power, machinery and equipment, and industrial investment. Projects to be approved by the BNDES must list how many jobs will be created.
"The businessmen who used to shop for funds on the international market and are not managing to obtain capital due to the financial crisis will be able to resort to the BNDES," he said. With the funds approved today, the BNDES will have a total annual budget of 166 billion reais (US$ 42.4 billion) this year for credit operations.
According to the minister, the funds for the BNDES will be supplied in the form of public bonds and financial surplus of the Treasury, which will receive the money back in the future. The BNDES will have to pay 70% of the US$ 42.2 billion corrected by the Long-Term Interest Rate (TJLP) plus a 2.5% premium a year, resulting in a final rate of 10.75% a year.
The remaining 30% of funds to be supplied to the Development Bank will be corrected by the cost of the National Treasury's shopping for funds abroad (around 6% a year). "This is how we fight the crisis, by maintaining investment," said Mantega.