The European Investment Bank (EIB) will be reviewing its activities in Brazil during the forthcoming week. A delegation of the Directorate for lending operations outside Europe will visit promoters and their projects.
Brazil is the main Latin-American beneficiary country of EIB loans for investment in productive activities. The EIB has so far extended 21 loans for a total amount of USD 1billion, representing some 52% of the entire activity in Latin America. The diversified portfolio of the financing extended by the EIB in Brazil supports directly private sector investments. Among the main investments supported are those of Pirelli, TIM, Telefónica, Itaú-BBA, Volkswagen, Mercedes, Veracel, as well as the Bolivia-Brazil gas pipeline.
Projects financed by the Bank present a mutual interest for Brazil and for the European Union (EU). In Brazil, the EIB offers medium-and long-term loans (no equity instrument at present). EIB loans are project-linked, oriented to the financing of the lasting components of an investment. Typical direct loans are in the order of USD 30-80 millions.
Eligible sectors are: economic infrastructure, energy, industry, agro-industry, mining, tourism and related financial sector.
For smaller projects the EIB can lend indirectly through Global Loans/Credit lines for allocations between EUR 0.5 and EUR 12.5 million. In Brazil, such facilities have been recently set up with Unibanco and Itaú BBA.
Director General Jean-Louis Biancarelli, head of the EIB delegation, aims to discuss ways to further EIB activity in Brazil, along with other multilateral and bilateral development agencies.
The loan is provided in the context of the EU co-operation policy with third countries. In Asia and Latin America (ALA), the EIB may lend up to EUR 2.48 billion during 2000-2006 to support capital investment projects implemented by subsidiaries of EU companies or joint-ventures between EU and ALA firms, or investment that results in environmental improvements or fosters regional integration. In the period 1993-2003, the Bank has lent EUR 3.0 billion under the three successiv ALA mandates, with 80 loans, in more than 20 countries. Under the current mandate, EUR 1 billion is still available. The EIB was set up in 1958 to finance investment furthering EU integration. It lends for regional development, infrastructure, energy, industry and environment. Outside the EU, the Bank contributes to the European development co-operation policy in some 130 countries in Central and Eastern Europe, Russia, the Balkans, the Mediterranean region, Africa, the Caribbean and the Pacific, Asia and Latin America.
In 2003, the EIB provided loans totalling some EUR 42 billion. The Bank borrows on the capital markets the funds for its lending. Its bonds have regularly been rated "AAA" by the leading rating agencies. The EIB can pass on to project promoters the excellent conditions it obtains on the markets. The EIB may finance up to 50 percent of project cost. On average it provides one third of the funding and co-finances investments with other institutions.