Eduardo Chagas, BNDES

791 views
680 views

Published on

Regional Leadership Forum
Advancing Sustainable Hydropower in Latin America and the Caribbean

0 Comments
1 Like
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total views
791
On SlideShare
0
From Embeds
0
Number of Embeds
6
Actions
Shares
0
Downloads
0
Comments
0
Likes
1
Embeds 0
No embeds

No notes for slide
  • BNDES founded in 1952, is a 58 years old institution. Just for comparison, Petrobras, the Brazilian oil company, our neighbor across Avenue Chile, was founded in 1954. Thus, BNDES is two years older than Petrobras. BNDES has been supporting all the investment projects of Petrobras from the very beginning of its activities. Many other large Brazilian companies have received funding from BNDES since they were small businesses. BNDES is responsible for the Brazilian industrialization high level and accountable for many major infrastructure investment projects. Under Law 5,662 and Decree 68,786, both dated June 21, 1971, BNDES became a state company under private law and its own equity, subject to general budgetary and accounting standards and specific regulations established by the National Monetary Council (CMN). BNDES is the main provider of long-term financing in Brazil. Our focus is project investment financing to Brazilian companies in order to provide efficient infrastructure, increase the Brazilian industry installed capacity, promote wealth generation, GDP growth and job creation. BNDES does not finance the acquisition of consumer goods, transfer of assets, purchase of land and real estate, export of commodities and cash to help paying down debt. BNDES is not a profit oriented organization, however, backed by excellent assets, has a record of high profitability. BNDES as a 100% state-owned company is not subject to bankruptcy – the Federal Government is jointly liable for the bank’s liabilities. Brazilian commercial banks mainly operate in short term financing. According to the Central Bank their average term for companies loans is measured in days (less than one year) while the BNDES average loan term is seven years.
  • Today BNDES’ priority is to support innovation projects. Companies that invest in innovation are able to compete in foreign markets, add value to their products, employ high skilled labor and pay better wages.
  • IBRD is a triple-A-rated financial institution with some unusual characteristics. Its shareholders and clients are sovereign governments, each of which has a voice in setting IBRD’s policies. The IDB 2008 Annual Report states that “there have been no write-offs in the sovereign-guaranteed loan portfolio, which, as of December 31, 2008, represented 95 percent of the $51.2 billion in loans outstanding. As of that date, all loans in the portfolio were performing. Allowances for loan and guarantee losses amounted to $169 million, compared to $70 million in 2007”. As of the end of 2008, the China Development Bank total assets amounted to RMB 3,821.2 billion, out of which loans outstanding were RMB 2,898.6 billion. 31.12.2008 Exchange rate: R$ 2.337 / US$
  • Gráfico em: J:\\Arquivos_XLS\\BNDES Institucional.xls Source: AP/DEORC US$ Performance Report http://www.bndes.gov.br/english/ Despite the international financial crisis, that became more severe in 2008’s second semester, BNDES’ performance broke a record in 2008. Disbursements amounted to R$ 92.2 billion. This number represents a growth of 42% as compared to 2007. It is worth noting the dramatic rise of disbursements rates, of 26.5% between 2006 and 2007. These amounts reveal expanded investments in the Brazilian economy bringing significant impact on the creation of new jobs, increase of the GDP, greater income per capita and social development. A return to investments is underway in Brazil and is expected to remain strong in the coming years. The BNDES’ disbursements closed 2009 at R$ 137.4 billion, an increase of 49% in relation to 2008, while approvals, at R$ 170.2 billion, rose 40%. The BNDES’ performance shows the strength of the Brazilian economy and reflects the success of the steps taken by the government to face the international financial crisis. Total disbursements include secondary market investments.
  • Eduardo Chagas, BNDES

    1. 1. BNDES and the Brazilian Electric Power Industry Eduardo Chagas ManagerElectric Power Industry Financing DepartmentBNDES – The Brazilian Development Bank November, 2012
    2. 2. BNDES Highlights• Founded on June 20th, 1952• 100% state-owned company under private law• Key instrument for implementation of Federal Government’sindustrial and infrastructure policies• Main provider of long-term financing in Brazil• Emphasis on financing investment projects• Support to micro, small and medium-sized companies• Brazilian Export Bank
    3. 3. Time Line50´s 60´s 70´s 80´s 90´s 00´s Today Infrastructure Heavy Industry – Consumer Goods Small and Medium-Sized Enterprises Technologic Development Imports Substitution Energy Agribusiness Exports Privatization Program Urban and Social Development Social Inclusion Innovation Sustainability Small Business
    4. 4. BNDES vs. Multilateral BanksUS$ million BNDES IDB IBRD CAF China DB Dec 31st, 2011 Jun 30th, 2011 Jun 30th, 2011 Dec 31st, 2011Dec 31st, 2010Total Assets 369.720 89.432 312.848 21.535 774.180Shareholders´Equity 36.102 19.794 38.679 6.351 60.953Net Income 5.354 20 930 152 5.618Loan Disbursements 82.676 8.400 21.839 7.694 86.690Capitalization 9,76% 22,13% 12,36% 29,49% 7,9%ROA (%) 1,65 0,02 0,30 0,71 0,8ROE (%) 23,12 0,10 2,40 2,39 9,5Established 1952 1959 1945 1968 1994Employees 2.402 2.000 10.000 6.711 IDB = Inter-American Development Bank IBRD = The International Bank for Reconstruction and Development (World Bank) (*) Unlike other institutions, 12-month fiscal year ends June 30th CAF = Corporación Andina de Fomento CDB = China Development Bank Capitalization = Shareholders’ Equity / Total Assets ROA = Return On average Assets ROE = Return On average Equity
    5. 5. Annual Disbursements180 168,4160 137,4 139,7140120 92,2 96,3100 82,380 71,6 64,960 52,3 49,8 47,1 35,1 4040 34 19,8 24,1 11,7 13,820 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 R$ Billion US$ Billion Converted to US dollar on the disbursement dates
    6. 6. Financing Structures
    7. 7. Financing Structures Corporate Finance Collaterals related to the financed company ´s assets, bank warrants and/or shareholders Project Finance Financing a specific project, not the sponsoring company’s business as a whole. Need to segregate the project costs, revenues and risks in an SPC
    8. 8. Project Finance • Financed Company: SPC • Project cash flow must be able to support all loan installments: - DSCR greater or equal to 1.20; - DSCR greater or equal to 1.30 (for projects with real IRR lower than 8% p.a.); • Pledge of all future revenues to loan providers • Equity minimum: 20% of total investment budget
    9. 9. BNDES & Project FinanceRisks• Project Rating;• Sponsors analysis;• Credit analysis of the receivables;• Engineer, Procurement and Construction – EPC constitution;• Risk sharing: participation of other lenders in the funding;• Strict compliance to Brazilian Environmental rules.
    10. 10. BNDES & Project Finance General collaterals • Pledge of SPC shares; • Pledge of rights of government concession; • Pledge of Receivables; • Escrow Accounts (Cash Waterfall); • Corporate or Bank Warrants; • Completion Bond and Performance Bond; • Equity paid in before first loan disbursement; • Equity Support Agreements.
    11. 11. BNDES & Project Finance Typical DSCR – BNDES Project Finance Example: Small Hydro Power Plant (19 MW) 1) Investment = R$ 144 million Financing = R$ 71 million Leverage = 49% 2) Amortization = 16 years Total period = 18 years 3) Constant Amortization System
    12. 12. BNDES & Infrastrucuture Project Bonds• BNDES is willing to share guarantees with Public Infrastructure Bondholders if Project Bonds meets key rules;• Infrastructure Project Bonds may be issued either by the SPC or by its Holding Company;• If the Holding Company is not listed in the stock market, it should sign a commitment to make its IPO at BOVESPA.
    13. 13. BNDES and the BrazilianElectric Power Industry
    14. 14. Operating Policies BNDES Financial Basic Industry Maximum Amortization Term Maximum Cost Spread Support (%) 20 (Hydros capacity higher than 1.000MW)1.Generation 16 (Hydros capacity from 30MW until 70 100% TJLP 0.9 Hydroelectric Projects 1.000MW) Gas & Cogeneration 14 70 100% TJLP 0.9 Thermoelectric Projects Coal & Oil Thermoelectric 50% TJLP 14 50 1.8 Projects 50% TJ-462 Alternative Sources (Small Hydroelectric, Wind, 16 80 100% TJLP 0.9 Solar) Biomass (Boiler < 60 bar) 16 80 100% TJLP 0.9 Biomass (Boiler > 60 bar) 16 90 100% TJLP 0.92. Transmission 14 70 100% TJLP 1.3 50% TJLP3. Distribution 6 50 1.3 50% TJ-462 Total Loan Cost: Financial Cost + Basic Spread + Risk Spread (0.40% p.a. to 3.57% p.a.) TJ-462 = TJLP + 1% p.a.
    15. 15. Power Sector: Approved Operations,2003 to 2012 (1st semester) Thousand R$ Installed Nº of Associated Segments BNDES Credit Capacity Projects Investment1. Generation 42.966 MW 197 64.928.721 123.992.035 Hydro Power Plants 32.241 MW 43 37.320.386 74.710.683 Thermal Plants 4.298 MW 11 5.539.573 12.365.852 Small Hydro 2.210 MW 111 7.146.472 10.855.631 Wind Power Plants 2.497 MW 22 7.860.363 14.631.229 Nuclear 1.405 MW 1 6.146.256 10.488.029 Biomass 315 MW 9 915.671 940.6112. Transmission Lines 23.507 Km 78 11.379.661 26.852.2693. Distribution - 65 12.967.012 23.406.5024. Escos - 17 62.290 101.978 TOTAL 357 89.337.684 174.352.785
    16. 16. Largest Electrical Power PAC Projectsin BNDES (since 2007) in R$ million BNDES Projects Status Support Total Capex MW Jirau Contracted 7,220.00 10,540.80 3,450.00 Angra III Contracted 6,146.23 10,488.03 1,405.00 Santo Antônio Contracted 6,135.17 13,178.14 3,150.00 Estreito Contracted 2,660.84 3,606.89 1,087.00 Fóz do Chapeço Contracted 1,655.84 2,207.12 855.00 Simplício Contracted 1,034.41 1,666.90 333.70 Mauá Contracted 739.33 991.28 361.00 Serra do Facão Contracted 587.86 849.66 212.58 Caçu e Barra dos Coqueiros Contracted 543.41 693.82 155.00 Dardanelos Contracted 485.09 754.55 261.00 Salto Contracted 289.70 406.68 108.00 Salto do Rio Verdinho Contracted 249.91 342.43 93.00 TOTAL   27,747.79 45,726.30 11,471.28
    17. 17. Contact Centers Rio de Janeiro (55 21) 2172-8888 São Paulo (55 11) 3512-5100 Brasília (55 61) 3204-5600 Recife (55 81) 2127-5800 Montevideo (59 82) 622-8875 London (44 20) 3008-6741 BNDES Card 0800 702 6337 Indirect Operations (55 21) 2172-8800 BNDES Exim (55 21) 2172-8566 www.bndes.gov.br/faleconosco Ombudsman 0800 702 6307 www.bndes.gov.br/ouvidoria

    ×