BNDES: Mercadante minimizes default by Venezuela and Cuba – 10/14/2023 – Market

The president of BNDES (National Bank for Economic and Social Development), Aloizio Mercadante, minimized this Saturday (14) the default of countries like Venezuela. The main debts total US$ 1.12 billion (R$ 5.69 billion at current prices), according to data released by the institution until June 30 of this year.

Mercadante stated that there is no reason to “nhenhenhem” when asked about defaults in the public development institution and in the country. He participated in the 1st Esfera Brasil International Forum, in Paris.

After the event, Mercadante gave an interview and said that the outstanding debts were “irrelevant”. “The important thing is to look ahead, at how we are going to build export growth and the development of Brazil. You [jornalistas] they are left with this ‘nhenhenhem’, which is something absolutely irrelevant to the BNDES”, he stated.

Three countries together owe more than R$5 billion to Brazil. Venezuela totals US$739 million (R$3.76 billion), while Cuba, US$261 million (R$1.33 billion), and Mozambique, US$122 million (R$620.7 million). The BNDES financed the so-called export of services to countries during past PT administrations.

In this modality, works carried out by Brazilian companies are included, and the FGE (Export Guarantee Fund), with resources from the Treasury, covers possible defaults.

According to data from BNDES, until June this year, the FGE had already reimbursed the institution US$ 1.09 billion in the sum of the three countries mentioned. The port of Mariel, in Cuba, and part of the Caracas metro, for example, were financed in this way.

“Export of services at BNDES has never been more than 1.3% of disbursement. So it is irrelevant. And it is highly profitable, historically, for BNDES, including for Brazil. The Guarantee Fund, the Union’s FGE, has a surplus today of R$ 7.5 billion”, stated Mercadante.

According to the president of BNDES, “possible defaults” do not break Brazil.

“The country delays payment, always recovers, at some point it starts paying again. And BNDES is a public bank, it is a patient bank, which will continue charging and wait for everything to be paid,” he said.

Asked whether Brazil will encourage new projects abroad, he stated that there are no plans for similar initiatives.

Mercadante highlighted what he considers positive points of the public bank in this first year of Luiz Inácio Lula da Silva’s (PT) administration. He stated that BNDES increased financing approvals by 40% and doubled support for exports of industrialized products in relation to 2022.

“That’s what counts, generating jobs and investment, improving and improving the bank’s practices, which is an extremely rigorous and competent bank. Default rates at BNDES are 0.01%. Show me any bank in the world that is more transparent than the BNDES, to be more rigorous with its criteria”, he said.

Electric bus

The president of BNDES also spoke about the migration to electric and hybrid vehicles. According to him, the BNDES will announce on Thursday (19) a financing line for electric buses in the country.

“Brazil is the second country that uses the most buses on the planet, second to India. And 52% of the buses that circulate in Latin America were produced by the Brazilian industry”, he stated.

“The Chinese came in very strongly with ready-made buses in Chile and Mexico. These are two historic markets in Brazil. So now, this week, we are going to provide the first financing for the production of electric buses, to finance electric buses produced in Brazil “, he said, without giving further details.

Mercadante explained that he defends national content and stated that four automakers will join the financing line. “We want to add more and more value,” he said.

According to him, the country needs to replace 170 thousand buses. “So it’s a very important market, with a lot of scale, a lot of purchasing power. And BNDES has a decisive role. We’re going to make a lot of progress,” he said.