Brazil’s National Economic and Social Development Bank (BNDES) is studying the creation of the Brazil-Venezuela Fund, a mechanism that will bolster the security of trade between the two countries.
The new fund should also ensure that the line of credit determined by President Luiz Inácio Lula da Silva can be made fully operational.
Half the resources for the Fund will come from the BNDES; the other half will come from the Venezuelan Development Bank.
This information was revealed yesterday by the president of the BNDES, Carlos Lessa, in an interview on national radio.
According to Lessa, this line of credit was established over a year ago by President Lula, who approved loans of up to US$ 1 billion for Brazilian trade with Venezuela.
The problem, in his view, has to do with the amount of collateral importers can count on, particularly when the transactions entail trade in more sophisticated items, such as components of construction projects, equipment, and machinery.
At the moment, Lessa explained, “what prevails are the guarantees provided by the Venezuelan Central Bank, covering up to US$ 200 million, an amount that has already been used for projects in Venezuela, such as the third subway line in Caracas and two hydroelectric plants.”
But “many other important opportunities exist for the country to expand its sales to Venezuela,” he declared.
In Lessa’s view, since there are many other products that the Venezuelans want to buy from Brazil, one must consider how to stimulate their expansion.
He said that Venezuela is interested in purchasing a dynamo and building other hydroelectric plants, in addition to buying machinery and tractors.
“But the difficulty is the collateral,” he recalled.
According to him, “the fund will enable these guarantees to materialize.”
Translator: David Silberstein