By Wellton Maximo
Micro, small, and medium-sized enterprises will have up to $700 million over the next three years to implement clean energy projects and gain access to the international market. Banco do Brasil signed an agreement in London with the Multilateral Investment Guarantee Agency (MIGA), a World Bank agency that provides support for smaller enterprises.
These businesses will have the chance to finance international trade operations, sustainable production, and renewable energy projects. For energy, they will be able to receive credit for the purchase of equipment and supplies such as biofuels and solar, wind, and biomass energy systems.
The initiative is part of MIGA’s Trade Finance Guarantee program, which offers guarantees against default risk, allowing global financial institutions to grant credit to Banco do Brasil with lower risk and lower interest rates.
The World Bank agency will offer up to $700 million over three years, with terms of up to one year for each payment. The first one will be an immediate $350 million, with the assistance of institutions such as Banco Bilbao Vizcaya Argentaria (BBVA) and HSBC Bank.
The operation has a very low risk rating (AAA), as MIGA will cover up to 95 percent of possible defaults, allowing Banco do Brasil to expand its offer of credit lines in foreign currency and diversify its sources of funding in the market.
The new credit lines, Banco do Brasil reported, are part of the Ecological Transformation Plan, which promotes investment in clean energy sources that reduce the environmental impact of production. The initiative is said to aim to boost the competitiveness of Brazilian micro, small, and medium-sized companies abroad, a segment that accounts for 99 percent of the country’s enterprises.
