BNDES expects 25% drop in credit for mobility

After an increase cycle pulled by local governments’ investments and advances in public-private partnerships (PPP), the National Bank for Economic and Social Development (BNDES) disbursement for urban mobility projects will fall from 20% to 25% in 2016. Last year, the development bank approved BRL 8.5 billion for urban transportation.

The lack of public money to invest, given the Union and States fiscal crisis, inhibits the arrival of more projects and, without them, 2017 will also be marked by drops, informed Rodolfo Torres, BNDES Head of Mobility and Urban Development Department.

Until 2012, BNDES had been approving, every year, approximately BRL 1 billion for subway and urban trains investments. Since then, new and higher loan applications arrived, including VLT (Light Rail, the new tram) and BRT (Bus Rapid Transit), many of them included in the so-called “legacy” of the 2014 World Cup and Rio Olympic Games.

Some featuring projects from the last few years include Line 6-Orange of São Paulo subway (BRL 9.5 billion in loans), Line 18-Bronze (monorail in ABC, São Paulo, with BRL 3.2 billion in loans) and Line 4 of Rio de Janeiro subway (BRL 6.6 billion).

For the first one, São Paulo government already had a financing of BRL 4.5 billion approved; however PPP consortium that conducts works and will operate the line (formed by Odebrecht Transport, Queiroz Galvão, UTC Participações e Fundo Eco Realty) is waiting loan approval of BRL 5.5 billion – still promised for this first quarter.

Line 18-Bronze project has two orders under analysis: BRL 1.2 billion from São Paulo government and BRL 2 billion from the consortium responsible for PPP (formed by Primav, CR Almeida Group, Cowan, Encalso and the Argentinian Benito Roggio). At least one loan is promised to the end of the first semester, declared BNDES.

From now on, with the fiscal crisis, there are no projects with this size provided for BNDES. After approving a BRL 2 billion loan for Salvador’s subway, operated by a PPP controlled by CCR, financing of Line 6-Orange and loans for Line 18-Bronze are the only ones missing.