Modern transportation systems for Brazilian cities

Under the banner of climate protection the two large development banks KfW and BNDES have concluded a contract to finance modern transportation systems in Brazil’s cities. The USD 265 million loan agreement, which was signed on the margins of the German-Brazilian government consultations, is intended to improve the municipal public transport systems and protect the environment in Brazil.

The cooperation in the field of environment and climate is one of the core themes of the consultations in Brasília, which are led by Federal Chancellor Merkel and the Brazilian president Dilma Rousseff.

The loan agreement for the financing of urban transport systems was signed in Rio de Janeiro at the beginning of this week by Stephan Opitz, Member of the Management Committee of KfW Development Bank, and Wagner Bittencourt de Oliveira, Vice President of the Brazilian development bank Banco Nacional de Desenvolvimento Econômico e Social (BNDES). KfW is supporting this programme on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ).

"Brazil and its urban population have to suffer from constantly congested roads as well as inadequate public transport systems in all metropolitan regions. We are helping Brazil to find and implement solutions to this problem. Together with our key partner BNDES, we are supporting the cities in building up modern transport systems, and thus are contributing towards global environmental and climate protection," said Stephan Opitz.

With the KfW loan and the Brazilian counterpart funds, an amount totalling more than USD 1 billion has been made available to provide transportation solutions in selected major cities over the next few years. KfW is currently reviewing the financing of a modern tramway in the centre of Rio de Janeiro. Besides the positive effects on the climate, the aspects that have proven particularly interesting in this project are the high level of innovation (first tramway in Latin America to not have overhead lines) and the expected visibility of the project in connection with the Olympic Games 2016.

The commitment is in line with the long-standing German-Brazilian cooperation for sustainable development that dates back more than 50 years. For instance, it is now exactly 50 years ago that the first loan agreement between KfW and BNDES was signed in Frankfurt am Main on 31 August 1965. At the time, the purpose of this loan was to finance investment projects of small and medium-sized private enterprises.