Brazil and China intend for the joint investment fund with a budget of US$20 billion dollars to start financing infrastructure projects from March, said the secretary of international affairs of the Ministry of Planning, Development and Management of Brazil.
Jorge Arbache, quoted by news agency Reuters said that the two countries want the fund, which was created in 2016, to finance the construction of railway lines to link regions producing soybeans and corn in Brazil to exporting ports.
The memorandum of understanding to establish an investment fund to finance infrastructure projects in the Brazilian economy was signed in Beijing by Jorge Arbache in October 2016. At the time it was decided that the fund would have an initial allocation of US$20 billion, of which US$15 billion would be the Chinese contribution and the remaining US$5 billion was the Brazilian contribution.
The Brazilian contribution is guaranteed by the National Bank for Economic and Social Development and state bank Caixa Economica Federal.
The secretary said that, unlike other funds set up by China, financing decisions related to this fund will be made based on the strategic priorities of both countries.
Arbache also said that the fund’s initial resources are likely to be increased in the coming years, if the outlined business model proves to be successful.
The secretary for international affairs of the Brazilian Ministry for Planning, Development and Management also said that the two governments are considering creating a guarantee fund to help companies interested in tendering for projects, but added that these negotiations are still at an initial stage. (macauhub)