Brazil secures $10 billion from banks for South American integration projects
2023.12.12 16:37
BRASILIA (Reuters) – Brazil’s government has spearheaded an effort to raise $10 billion from multilateral and development banks to fund infrastructure projects to advance South American integration, seeking enhanced trade and reduced transportation time to Asia.
Brazilian development bank BNDES is expected to allocate $3 billion within this effort, primarily for funding projects that Brazilian states and municipalities propose to connect to this network, the Planning Ministry said on Tuesday.
Simultaneously, the Inter-American Development Bank (IDB) will contribute $3.4 billion, the Development Bank of Latin America (CAF) will provide $3 billion, and regional fund Fonplata will give $600 million for funding countries in the region.
“We want other banks to join later, such as the World Bank and the New Development Bank (NDB) of the BRICS,” said Planning Minister Simone Tebet.
Resources from these banks will be channeled into a fund whose governance is still under development.
According to the minister, the initiative emerged from a mapping exercise conducted by the federal government in collaboration with the 11 Brazilian states bordering neighboring countries, which identified 124 projects within the country deemed essential for five integration routes in the region.
Tebet said these routes hold the potential to be completed by 2027.
The minister said federal funding was already earmarked for these projects, which were part of the portfolio of 9,200 projects under Brazil’s Growth Acceleration Program (PAC).
However, the resources from the pool of institutions will be directed toward enabling neighboring countries to connect their logistics infrastructure network to these points.
“Brazil is accustomed, through the Atlantic, to focus on coastal states targeting Europe. Now, with this open market in Asia, it is evident by numbers and mileage that the easiest route is through the Pacific,” Tebet said, estimating that once the routes are completed, the potential time savings in transportation to Asia could reach up to 20 days.
She added that, while the potential is significant, there is no estimate of how much Brazil’s trade flow could grow from these initiatives.
