IFC, IADB, and BNDES Promote Investment in Infrastructure in Brazilís Private Sector
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 countryís competitiveness and improve peopleís 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 IFCís global experience in structuring infrastructure projects for governments with BNDESí understanding of local needs and IADBís 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.
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. IFCís 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.
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