Brazil suspends funding for projects in Angola and Mozambique

13 October 2016

The National Bank for Economic and Social Development of Brazil (BNDES) has suspended the payment of US$4.7 billion for 25 projects in foreign countries, including Angola and Mozambique, announced the state bank in a statement.

The suspension of payment relates to contracts that have been awarded to engineering and construction companies, including Odebrecht, OAS, Queiroz Galvão, Camargo Corrêa and Andrade Gutierrez, which are involved in the corruption scandal in Brazil known as “Operation Jet Wash.”

In a statement on Tuesday, the BNDES said it planned to adopt a set of new procedures for financing operations of Brazilian exports of goods and engineering and construction services supported by the BNDES Exim Post-shipment line.

The new procedures will be the basis for the analysis of future operations and for reassessment of the current loan portfolio, consisting of 47 projects at various stages (contracted, approved, under analysis and consultation), including 25 that have been awarded and their disbursements suspended since May of this year.

After disclosing the new rules for this type of financing, BNDES said it was examining each of the 47 projects in the current portfolio, which totals financing of about US$13.5 billion.

The state bank also said that the 25 projects contracted already reached an amount of US$7 billion, of which US$2.3 billion has already been disbursed, with US$4.7 billion yet to pay.

In the case of Mozambique funding for the Moamba Major dam project was suspended, a project for which they US$320 million were allocated from a total cost of US$466 million.

Information from the Regional Administration of Southern Waters (ARA Sul) shows that the work on this dam, with a capacity to store 760 million cubic metres of water, will be partially used for irrigation and production of 15 megawatts of electricity, and should be completed by the end of 2019. (macauhub)