Brazil raises cap on subsidized credit for tech investments
"With proper allocation and the use of blended finance structures, these resources are expected to play a key role in modernizing the country's industrial base," the Finance Ministry said in a statement.
The move comes as President Luiz Inacio Lula da Silva's administration also prepares to launch a new policy to attract data centers by exempting related tech investments from federal taxes.
The subsidized credit is offered through a program from state development bank BNDES, which provides financing indexed to the so-called Reference Rate at a cost of around 1.4% per year, to support Lula's industrial policy.
By comparison, Brazil's benchmark interest rate currently stands at 15% per year.
The funds for the program come from the government's Workers' Support Fund (FAT), whose allocation cap was raised to 2.5% from 1.5% amid a shortfall in resources to meet demand, said the Finance Ministry.
The increased FAT allocation amounts to an implicit subsidy that is off-budget and does not impact the primary fiscal balance.
($1 = 5.4570 reais)
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