The Brazilian Development Bank ("BNDES") has recently published its projection of investments in the infrastructure and industrial sectors for the period between 2015 and 2018.
The projection prepared by BNDES's Economic Research Division (Área de Pesquisa e Acompanhamento Econônico - APE) and the Sector Analysis Committee (Comitê de Análises Setoriais - CAS) takes into account the projects and investment plans of the companies, including those that are not supported by BNDES.
BNDES foresees a 15.8% fall in investments in the industry for the next four years due to the current economic situation in Brazil. However, in as far as investments in infrastructure are concerned, BNDES expects a 19.9% increase because the Federal Government continues to prioritize overcoming bottlenecks in ports, airports and railroads, developing the fourth generation of mobile phone technology, enhancing power supply security and diversifying the country's power matrix.
Among the expected investment of BRL 578.9 billion in infrastructure, BRL 210.3 billion are associated with investments in power projects, as follows:
The 7.2% increase in the investment projection for the power industry is justified by the expansion of investments in thermoelectric plants that exceed the forecast reduction in the investments in hydroelectric plants, as well as the development of new wind power projects, which alongside with solar power projects have exceeded the investment expectations for 2014.
According to a statement made by a BNDES representative, the bank will disburse BRL 20 billion to the power industry this year, which will represent a 30% increase in relation to the average disbursed amount in recent years. BNDES has been financing an average of 65% of the power investments for the last 12 years and during such period BNDES has disbursed BRL 155.4 billion to the benefit of 504 power projects, representing a total investment of BRL 265 billion.
To access the BNDES Investment Perspectives bulletin, click here.
Visit us at Tauil & Chequer
Founded in 2001, Tauil & Chequer Advogados is a full service law firm with approximately 90 lawyers and offices in Rio de Janeiro, São Paulo and Vitória. T&C represents local and international businesses on their domestic and cross-border activities and offers clients the full range of legal services including: corporate and M&A; debt and equity capital markets; banking and finance; employment and benefits; environmental; intellectual property; litigation and dispute resolution; restructuring, bankruptcy and insolvency; tax; and real estate. The firm has a particularly strong and longstanding presence in the energy, oil and gas and infrastructure industries as well as with pension and investment funds. In December 2009, T&C entered into an agreement to operate in association with Mayer Brown LLP and become "Tauil & Chequer Advogados in association with Mayer Brown LLP."
© Copyright 2015. Tauil & Chequer Advogados, a Brazilian law partnership with which Mayer Brown is associated. All rights reserved.
This article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.
