Brazil's infra model to grow local bond markets

Author: Zoe Thomas | Published: 30 Jul 2015

In an effort to diversify sources of financing for infrastructures projects, Brazil has introduced a new model to balance loans from the national development bank with funding from debt capital markets.

The new system will require large projects looking for a loan from the National Bank of Social and Economic Development (BNDES) to also raise a minimum amount of funding from locally-issued debt securities.

It’s hoped that this programme will create more liquidity and speed up much-needed project development, as much of the country’s existing infrastructure is in disrepair. Brazil ranked 120 out of 144 countries in quality of infrastructure rankings conducted by the World Economic Forum in 2014.

The programme launched in June but a cumbersome application process has meant it will...