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Brazil government launches plan to finance urban rail systems [free access]

July 3, 2019

The Government of Brazil has launched a programme to finance the procurement and renewal of urban rail systems such as rolling stock, signalling, telecommunication, and control systems in the country under the programme named Programa de Renovação de Frota de Transporte Público Coletivo Urbano de Passageiros sobre Trilhos (RETREM). The registration for this programme is expected to begin in July 2019.

 

Brazil National Bank for Economic and Social Development/Banco Nacional de Desenvolvimento Econômico e Social (BNDES) will fund the programme under two lines of financing: BNDES Finem– Environment for the purchase of rolling stock for the urban rail transit system, and BNDES Finem– Urban Mobility for the purchase of infrastructure systems (including rolling stock, project financing and studies, systems (signalling, telecommunications, and control), machinery, and equipment).

 

Public financing may be used for public rail transport systems, private concessionaires or permit holders and companies participating in consortia, and special purpose companies that hold the concession or permission of urban rail systems in operation.

 

The rate of interest is the long-term rate/ taxa de longo prazo (TLP), plus 0.9 per cent or 1.3 per cent per annum of the base rate, depending on the line plus the credit risk. The grace period is up to 6 months after the start of the operation and the amortisation period is up to 34 years.  Under this programme, loans worth USD260 million (BRL1 billion) are expected to be released annually.

 

Currently, there are 21 operational urban rail networks, operated by 15 operators, in Brazil. These networks comprise 48 lines which span over 1,100 km.