JBIC PROVIDES UNTIED LOAN TO BRAZIL'S RIO GRANDE DO SUL STATE - Cofinanced Loan with IDB -
1.Japan Bank for International Cooperation (JBIC; Governor: Hiroshi Yasuda) signed today at its head office a loan agreement totaling the yen equivalent of $75 million (up to the maximum amount of 10 billion yen equivalent) with the State Government of Rio Grande do Sul of the Federal Republic of Brazil. This untied loan is cofinanced with the Inter-American Development Bank, with the Government of Brazil providing a guarantee. The purpose of the loan is to improve roads in the state by providing long-term funds for paving existing unpaved roads which are linked to major roads and cover 800 kilometers.
2. Rio Grande do Sul is the southern most state of Brazil, and Brazil's largest grain and coal producer as well as the second largest exporter next to the State of Sãn Pauro. Automobile, machinery and parts industries are located in the state, making it the base for domestic and overseas shipping of these products. However, inferior road conditions burden the state with high transportation costs, and their improvement is a pressing need.
3.This loan will support economic development by increasing the efficiency and volume of transportation for grain, coal and industrial products produced in the state that is a major supplier of these goods in Brazil. It will also help Japanese firms in Brazil, including those in the State of Rio Grande do Sul, to expand and develop their business operations.
4. Since the State of Rio Grande do Sul is located in the heart of MERCOSUR (the Southern Common Market) and is the key node of land transportation, it is expected that reduction in transportation costs through this project will lead to expanding trade within MERCOSUR.