Brazil’s BNDES to Sell Assets, Seeks to Lure Private Investment

  • Regulatory framework needed for concessions, privatizations
  • Bank to return to historical lending average: gov’t official

Brazil’s state development bank BNDES will sell equity assets and utilize concessions and privatizations as it seeks to attract the private investment needed to pull Latin America’s largest economy out of recession, according to the bank’s new president.

Maria Silvia Bastos Marques took over as head of the bank known as BNDES on Wednesday, saying she will personally oversee the institution’s privatizations and public-private partnerships until she selects a director to do so. She said she would be “pleased and gratified” if Rio de Janeiro state decides to enlist BNDES to help privatize its water and sewage utility.

“A very clear and well defined regulatory environment is fundamental for us to have a new wave of concessions, public-private partnerships and even privatizations,” Bastos told reporters in Rio de Janeiro. She added she doesn’t foresee large-scale privatizations such as those Brazil undertook in the 1990s but possibly sales of companies controlled by Brazilian states.

Bastos, 59, advised a former BNDES president on privatization before working as the director of recently privatized steel giant Cia. Siderugica Nacional SA. She later became the head of Rio’s Municipal Olympic Company, which coordinates projects related to the summer games in August.

New Finance Minister Henrique Meirelles said he intends to reinforce BNDES’s role in order to rekindle investment, even as he requires the state bank to return 100 billion reais ($28 billion) in Treasury loans that had turned it into the world’s fastest-growing state lender since the 2009 crisis.

That’s raised speculation BNDES may see its role reduced under Bastos as compared to its massive lending program during the administration of suspended President Dilma Rousseff, who was removed last month to face an impeachment trial over whether she acted illegally by using state banks to help cover up a growing budget crisis.

Bastos said BNDES “certainly won’t have a brilliant year” in terms of disbursements, adding that the bank will analyze when to sell some of the assets held by BNDESPar, its investment arm that has minority equity stakes in more than 100 companies, in order to to invest in and support new companies.

“By definition, it shouldn’t hold permanent stakes,” she said. “On the other hand, you have the situation of the economy. We need to look at the timing and the assets that we’ll prioritize for divestment.”

Mansueto Almeida, a former critic of BNDES under Rousseff and the Finance Ministry’s new secretary of economic monitoring, estimated last month that the bank’s average annual lending will return to its historical average.

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