ANNOUNCEMENT 16 Jan 2014

On 16 January 2014, the Brazilian Development Bank BNDES granted a loan to Sete Brasil Participacoes SA.The financing for these farms entails the condition to source part of the construction inputs from Brazil.

NUMBER OF INTERVENTIONS

2

  • 2 harmful
  • 0 neutral
  • 0 liberalising

SOURCE



Bloomberg, 16 January 2014, 'Sete Brasil Gets $3.7 Billion Loan to Build Rigs for Petrobras': http://www.bloomberg.com/news/2014-01-16/sete-brasil-gets-3-7-billion-loan-to-build-rigs-for-petrobras.html

Brazilian Development Bank (BNDES), 16 Janaury 2014, 'BNDES apoia Sete Brasil com R$ 10 bi em investimentos para constru??o de sondas': http://www.bndes.gov.br/SiteBNDES/bndes/bndes_pt/Institucional/Sala_de_Imprensa/Noticias/2014/industria/20140116_setebrasil.html

Colby, Seth. (2012). Explaining the BNDES: what it is, what it does and how it works. CEBRI Artigos, Volume 3, Ano VII, p. 6: http://www.cebri.org/portal/publicacoes/cebri-artigos/explaining-the-bndes

BNDES, Condi??es espec?ficas: http://www.bndes.gov.br/SiteBNDES/bndes/bndes_pt/Institucional/Apoio_Financeiro/clientes.html

BDNES, Itens pass?veis de apoio condicionado: http://www.bndes.gov.br/SiteBNDES/bndes/bndes_pt/Institucional/Apoio_Financeiro/itens_apoio.html


Inception date: 16 Jan 2014 | Removal date: open ended
Still in force

Local sourcing

In the USD 3.7 billion financing for the oil rig producer, the Brazilian Development Bank imposes strict local content requirements on the production of wind turbines, e.g., towers and blades (at least 60%) and some parts of the rotor and the nacelle. Besides this, the bank provides credits with below-market interest rates only to legal persons (private or public) based in Brazil.

AFFECTED SECTORS

 

AFFECTED PRODUCTS

 
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Inception date: 16 Jan 2014 | Removal date: open ended
Still in force

State loan

The Brazilian Development Bank BNDES granted a US$ 3.7 billion (8.8 billion reais) loan to Sete Brasil Participacoes SA. Besides the loan, BNDES’s investment branch, the BNDESPAR, will subscribe to 1.2 billion reais in convertible debentures from Sete. The oil-rig producer is, amongst others, held by Petroleo Brasileiro SA and Banco BTG Pactual SA. To motivate the loan, BNDES cites its support for the Brazilian government's local content requirement policy. Said policy requires that 65 percent of inputs in the development of Brazilian oil fields are sourced domestically. Furthermore, BNDES seeks to support the establishment of a national champion in deepwater rig construction as well as the creation of "quality jobs" at Brazilian shipyards. The beneficiary, Sete, was created to commission the construction of oil rigs for state-owned Petrobras. The company will only supply the rigs and commission the production to shipyards. The loan aims at backing the production of nine out of 29 offshore drilling rigs. 28 of them have been commissioned by Petrobras which wants to tap the Brazilian offshore pre-salt reserves, one of Brazil’s biggest oil discoveries. Five Brazilian shipyards are responsible for the construction of the oil-rigs: Jurong Aracruz, Estaleiro Atlântico Sul, BrasFels, Estaleiro Rio Grande and Estaleiro Enseada Paraguaçu. In general, the Brazilian Development Bank provides credits with below-market interest rates to legal persons (private or public) with headquarters and administrations in Brazil. In the case of companies with headquarters abroad, majority shareholders (private or public) need to have residence in Brazil.
 
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