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A Graveyard of Unfinished Work Left in Development Bank’s Wake

  • Brazil’s BNDES has halted disbursements to projects abroad
  • The about-face impacts work in Venezuela, Africa, Caribbean

The construction site at the Dominican Republic’s Punta Catalina power plant should be booming, but work has slowed to a crawl. An ocean away, along a river that snakes through canyons in southern Africa, Angola’s Lauca hydroelectric dam faces a similar fate.

Both are casualties of an ambitious state lending program gone awry as Brazil’s development bank, once a rival to the World Bank by both the size of its loan portfolio and disbursements, retreats following accusations of gross overreach and questionable spending. Of the $7 billion that BNDES committed to 25 construction projects abroad since 2009, only $2.3 billion has been disbursed, and the lender said in October it suspended any more payouts after a sweeping corruption investigation revealed that many of the builders had paid bribes to secure lucrative contracts at home.