Brazil Emergency Assistance Program for Economic Recovery (NDB-brazilemergencyassist)

Countries
  • Brazil
Where the impacts of the investment may be experienced.
Financial Institutions
  • IDB Invest (IDBI)
  • New Development Bank (NDB)
International, regional and national development finance institutions. Many of these banks have a public interest mission, such as poverty reduction.
Project Status
Approved
Bank Risk Rating
FI
Risk rating varies among banks and may refer only to the particular investment and not to the risk for the project as a whole. Projects marked 'U' have an 'Unknown' risk rating at the time of disclosure.
Voting Date
Dec 7, 2020
The estimate day the bank will vote on a proposed investment. The decision dates may change, so review updated project documents or contact the EWS team.
Borrower
Government of Brazil
The holder of the loan, grant, or other investment.
Sectors
  • Finance
  • Industry and Trade
  • Law and Government
The service or industry focus of the investment. A project can have several sectors.
Investment Type(s)
Loan
The categories of the bank investment: loan, grant, etc.
Investment Amount (USD)
$ 1,000.00 million
Value listed on project documents at time of disclosure. If necessary, converted to USD$. Please review updated project documents for more information.
Currency conversion note:
Bank reported USD 1.0 billion
Converted using 2020-12-18 exchange rate.
Project Cost (USD)
$ 3,500.00 million
Value listed on project documents at time of disclosure. If necessary, converted to USD$. Please see updated project documentation for more information.
Currency conversion note:
Bank reported USD 3.5 billion
Converted using 2020-12-18 exchange rate.
Primary Source

Original disclosure @ NDB website

Updated in EWS Dec 18, 2020


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Project Description
<table border="0" width="100%" cellspacing="0" cellpadding="0"> <tbody> <tr> <td style="width: 16%; text-align: left;"><strong>Project Context</strong></td> <td style="width: 84%;" colspan="3"><br /><br /><br /><br /> <div>The crisis unraveled by the COVID-19 outbreak represents an unprecedented impact to Brazil&rsquo;s economy. Macroeconomic indicators are deteriorating, and unemployment and household debt levels are expected to increase further. Small and Medium Enterprises (SMEs) are especially impacted as they face the most severe credit restrictions. In Brazil, SMEs represent 99% of the total number of business firms, 27% of the country&rsquo;s GDP, 52% of the employment generation and 40% of the country&rsquo;s payroll. To address the adverse impact on SMEs, the Government of Brazil (GoB) has created the Credit Access Emergency Program (PEAC). The Program consists of expansion of the existing Investment Guarantee Fund (FGI) with an additional investment of USD 3.5 billion to improve credit access, increase credit limits and reduce borrowing costs for SMEs.</div> </td> </tr> <tr> <td style="width: 16%; text-align: left;"><strong>Project Objective</strong></td> <td style="width: 84%;" colspan="3"><br /><br /><br /><br /> <div>The Emergency Program (Program) is proposed to address the adverse economic impact of COVID-19 pandemic and enable economic recovery. Its objective is to improve SMEs&rsquo; access to credit by providing guarantees to help them overcome any temporary liquidity problem, ensure the continuity of their operations, and strengthen their financial sustainability, thereby preventing significant loss of jobs.</div> </td> </tr> <tr> <td style="width: 16%; text-align: left;"><strong>Project Description</strong></td> <td style="width: 84%;" colspan="3"><br /><br /><br /><br /> <div>The NDB&rsquo;s loan (Loan) is to support the recovery of the Brazilian economy by providing resources for the Government of Brazil (GoB) to capitalize the FGI-PEAC Fund that provides guarantees to participating Financial Institution (FIs) on loans provided to SMEs.<br /> FGI was created in 2010 and is managed by the BNDES. FGI, in partnership with FIs, provides fast and less costly guarantees on SME loans availed from FIs. The Fund was expanded in 2020 under PEAC, as a response from the GoB to the COVID-19 impact on the economy. The Fund provides guarantees to participating FIs for 80% of the loans provided to SMEs, limited to BRL 10 million (USD 1.8 million) per SME per FI. No premium rate is charged and only minimum personal guarantees are required in accordance with the respective FIs&rsquo; policies.</div> </td> </tr> </tbody> </table>
Investment Description
  • IDB Invest (IDBI)
  • New Development Bank (NDB)

The total cost of the investment is also financed by the Brazilian Government (USD 2.3 bi) and by the IDB (USD 0.2).

Contact Information

ACCESS TO INFORMATION

You can submit an information request for project information though a form at the bottom of the following webpoage https://www.ndb.int/about-us/contact-us Alternatively, you can send an e-mail to info@ndb.int

ACCOUNTABILITY MECHANISM OF NEW DEVELOPMENT BANK

The New Development Bank (NDB) does not currently have an independent accountability mechanism to accept complaints related to NDB-financed projects. The Bank does have a whistleblower mechanism that receives complaints about misconduct related to corruption, fraudulent practices and instances of money laundering in projects financed by the NDB and/or against the NDB staff members. To learn more about the whistleblower mechanism and how to file a complaint, access this webpage at: https://www.ndb.int/about-us/whistleblowing.

 

Contacts NDB Borrower Implementation Agency
Project Team Leader:

Raisa Leao
leao.raisa@ndb.int

Ludmila Silva
silva.ludmila@ndb.int

Ministry of Economy of the Government of Brazil:
Marcelo Guaranys
marcelo.guaranys@economia.gov.br
BNDES:Fernando Mantese
faoma@bndes.org