New Developments On Financing Of Infrastructure Projects In Brazil

The Brazilian government has adopted two important measures by means of federal decrees, both dated April 1st, 2013, in order to facilitate the financing of infrastructure projects in Brazil, namely: (i) Decree 7595/2013 - that reduced to zero the rate of the Brazilian Tax on Exchange Transactions (Imposto sobre Operações de Crédito, Câmbio e Seguro, ou relativas a Títulos ou Valores Mobiliários - IOF) due in connection with these credit transactions¹; and (ii) Decree 7696/2013 – that created a new state-owned company called Brazilian Management Agency of Funds and Guarantees (Agência Brasileira Gestora de Fundos e Garantias - ABGF).

According to Decree 7696/2013, ABGF is a public enterprise (empresa pública) to be structured as a corporation (sociedade anônima) linked to the Ministry of Finance, with an indefinite duration. Its sole shareholder will be the Federative Republic of Brazil (the Union). A General Shareholders' Meeting shall be convened for the