How Brazil’s BNDES Used Project Finance to Fund the 2014 FIFA World Cup, Part 2
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19th November 2014

S&P evaluates how the Brazil is innovating project finance to fund its mega-projects. 
In a previous article, we reported on a recent study by S&P on how Brazil’s  Banco Nacional de Desenvolvimento Económico e Social (BNDES) is using Public Private Partnerships (PPPs) to build infrastructure in the country – especially for this past summer’s World Cup, and the upcoming 2016 Olympic Games in Rio de Janeiro.
While that article focused on the mechanisms and risks associated with the financing of the projects in general, this article takes into account two specific projects as case studies for how this financing is undertaken, and utilized S&P’s Scorecard to rate them.
To provide context,  BNDES created two programs. The first is “ProCopa Arenas,” established to construct or upgrade infrastructure in the 12 cities that hosted the World Cup. The ProCopa Arenas allowed BNDES to finance up to 75 percent of the investments on infrastructure building and Arenas’ projects, limited to the maximum amount of BRL $400 million. The bank approved BRL $3.8 billion for building purposes for all arenas. Most of the financing is through intermediary banks, to which the national bank transfers the credit risk. The program financed 11 out of the 12 arenas built, the Brasília stadium being the exception.
The second BNDES program, ProCopa Turismo, is to promote the construction and modernization of national hotels. This program had 17 approved loans until September 2013, which …

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