BNDES cuts interest rates to encourage ethanol offer in Brazil
Jul 30, 2013 - The Brazilian National Social and Economic Development Bank (BNDES) has reduced the interest rates for loans under Prorenova, a programme for support of new sugar cane plantations, in an effort to increase the sugar cane harvest and thus boost the offer of ethanol in Brazil.
Prorenova was launched in 2012 but so far it has not attracted strong interest from producers.
The interest rate is now 5.5% per year, down from 6.8% previously.
An increase of the ethanol offer is needed to reduce the gasoline (petrol) demand and consequent imports which have been causing losses of Petrobras (SAO:PETR3), Brazil's federal oil and gas company.
In November BNDES had made Prorenova accessible to foreign companies also in an effort to encourage the ethanol production.
This year, the credit line involves BRL 4 billion (USD 1.767bn/EUR 1.333bn), the same like in 2012. However, in 2012 only BRL 1.38 billion was used.
Requests for loans under the programme should be made by December 31. The financing period is 72 months, with 18 months grace period.
(BRL 1 = USD 0.442/EUR 0.333)