BDMG Project Showcase: Public Financing Institutions and their Role in Development I Foro de Integracion y Desarrollo Montevideu, March 05th.
M I N A S G E R A I S OVERVIEW 21 MILLION INHABITANTS [2018] Similar to Australia 2 nd most populous state of Brazil Brasília LARGER THAN FRANCE AND Belo Horizonte GERMANY In Territorial extension São Paulo Rio de Janeiro Total area of 586.5 km 2 4 th largest state in Brazil 853 MUNICIPALITIES and 12 regions very different between themselves 50 municipalities concentrate 53% of the population
M I N A S G E R A I S ECONOMY 3 rd LARGEST GDP between Brazilian states: USD 149.62 billion* [2018] 6.9% 2 nd LARGEST INDUSTRY Agribusiness 11.6% of Brazilian industry 24.8% Industry 3.6 p.p. higher than 68.3% Brazilian average Service Minas Gerais – GDP (2018) Sources: FJP, IBGE, PNADC (T) * Exchange rate: BRL/USD 4,00, on May 15 th ** AV at 2016’s prices
2. INSTITUTIONAL
INSTITUTIONAL The Minas Gerais Development Bank (BDMG) is a financial institution founded in 1962 and controlled by the State of Minas Gerais, with the purpose of promoting the state's economic, financial and social development. For more than 57 years BDMG has actively participated in the development of Minas Gerais. In its history, it has focused on generating opportunities and sustainable regional growth. Its actions are distributed throughout the territory of the state and it supports various sectors of the economy - industry, agriculture, agribusiness, commerce and services. In addition to these sectors, BDMG finances infrastructure and urbanization projects in the cities of Minas Gerais. It operates with its own resources and as a financial agent of BNDES, also working with other financing programs, such as Funcafé, Finep and BNB. Furthermore, it is also the financial agent of the Development Funds of the State of Minas Gerais.
I N S T I T U T I O N A L HISTORY Participation in important government Direct support to the main strategic projects economic sectors in Minas Gerais Jaíba II Minas Competitiva ... 1970-1980 1990 2000 2010 2020 1962 STARTING POINT Fundraising in local and Bank as articulator of the international markets State development system State Funds Creation Web-based Credit
I N S T I T U T I O N A L KEY NUMBERS BRL 5.6 billion 21.440 Loan Portfolio² Total clients² 87 % BRL 1,308 million Presence in the State Disbursement in 2019¹, generating the follow impacts³: of Minas Gerais (738 municipalities with at least 1 client) 22.677 jobs supported BRL 974,6 million in impact on production BRL 44,2 million in tributes ¹ Disbursements in 2019 ² In December 2019 ³ Estimated values
O P E R A T I O N A L P E R F O R M A N C E FUNDING UPCOMING NEGOCIATIONS WITH MULTILATERALS More than BRL 2.5 billions In local and foreign funding since 2012 First Regional Development Bank in Brazil to raise funds in the international market. USD 200 million EUR 131 million R$ 1,4 billion Local market Onlending FUNCAFÉ
S T R A T E G Y PLANNING DRIVERS Results-based Impact Competitiveness Partnership culture DIGITAL TRANSFORMATION
S T R A T E G Y TO BE RECOGNIZED AS A LOCAL DEVELOPMENT BANK FOCUSED ON DEVELOPMENT IMPACT MAXIMIZE IMPACT BE A SPECIALIST IN AND MINAS GERAIS TO DEVELOPMENT GENERATE VALUE ENSURE FINANCIAL FOR SOCIETY SUSTAINABILITY
S T R A T E G Y WHAT DO WE FUND? MUNICIPALITIES SOCIAL ENVIRONMENT Renewable Energy Education and public health projects Municipal infrastructure projects Energy efficiency Water and Sanitation PPP and structured projects Sustainable consumption and Financing for private clients production AGRIBUSINESS MICRO AND SMALL COMPANIES, GENDER Sustainable agriculture and AND INNOVATION natural resources management Online credit for micro and small businesses “ Empreendedoras de Minas” Tourism Financing for innovative companies and partnerships in the Innovation ecosystem
S T R A T E G Y MUNICIPALITIES From 2012 to 2019, BDMG released R$ 1.2 billion to municipalities. All contracts are for funding investment projects , for example in mobility, sanitation, refurbish in public buildings, asphalt paving and acquisition of machinery and equipment. BDMG MAQ For the acquisition of machinery for operations on public roads. BDMG URBANIZA For investments in urban infrastructure, especially paving and drainage. 437 municipalities with active contracts in 2019 BDMG SANEAMENTO BDMG is responsible for 80% of the financing granted to For the expansion of water treatment and municipalities, outperforming even federal banks. sewage, and treatment and solid waste.
S T R A T E G Y MUNICIPALITIES INCLUSIVE AND SUSTAINABLE WATER AND SANITATION URBANIZATION BRL 86.3 million BRL 436.3 million Sanitation projects in portfolio ECOSYSTEMS Portfolio of urban mobility and urbanization projects URBAN MOBILITY QUALITY INFRASTRUCTURE BRL 49.9 million BRL 287.4 million Pampulha Lagoon Dredging Infrastructure projects for BRL 26 million intercity roads Bus Rapid Transit - BRT in Belo Horizonte and Metropolitan Region
S T R A T E G Y MUNICIPALITIES PROJECT PREPARATION FACILITY Objective: Transform BDMG into an infrastructure accelerator, attracting multilateral agencies and private sector investments to identify, structure and implement projects. Opportunities Challenges Weak institutional capacity weakens project Creation Facilities by development banks to structuring support project structuring Lack of well-structured projects represents a Development banks have qualified teams bottleneck for long-term infrastructure with technical expertise and funding to investment finance projects Fiscal situation restricts the hiring of Procurement project preparation services in technical consultants accordance with IDB rules Municipal authorities have little or no Increased capillarity to support relevant experience in project structuring municipal projects
S T R A T E G Y MUNICIPALITIES POTENTIAL PIPELINE FOR MUNICIPALITIES: Street Lighting Water and sewage Solid Waste CAPEX: R$ 4 bi CAPEX 1 : R$ 2,8 bi CAPEX 2 : R$ 151 mi Health Education Smart Cities 1 Considering the region of Renova Foundation, Copanor Norte and Brumadinho region 2 Estimates in BNDES Setorial 40.
S T R A T E G Y HEALTH AND EDUCATION EDUCATION HEALTH BRL 164 million BRL 84.9 million METROPOLITAN PPP INOVA BH PPP BRL 52.7 million BRL 67.1 million Balance in portfolio – Metropolitan Portfolio for the construction of 37 teaching units Hospital (“UMEIs”) with the ability to attend 19,000 children PRIVATE HOSPITALS BRL 41.7 million Portfolio of private hospitals, construction of a new hospital and maintenance of other units “BNDES SAÚDE” SCHOOL BUSES BRL 11.6 million BRL 5.7 millions In portfolio, focusing on the improvement of Disbursed on FINAME in management, expansion and modernization 2015 of health institutions
S T R A T E G Y ENVIRONMENT SOLAR ENERGY FINANCING BRL 63.1 million Solar financing portfolio in 2019 68% of the operations in Minas Gerais’s north region +45,8 GWh/year Equivalent to the average annual consumption of 23,800 households in Brazil
S T R A T E G Y MICRO AND SMALL ENTERPRISES MICRO AND SMALL COMPANIES “EMPREENDEDORAS DE MINAS” Product launch on 2018, strengthening socioeconomic development and gender empowerment BRL 42 million 1,736 entrepreneurs assisted Portfolio in 2019 in 287 municipalities BRL 1.5 billion disbursed 18% of BDMG’s digital platform Between 2012 and 2019 TOURISM +49,000 +600,000 Average monthly Accesses in 2019 access in 2019 BRL 23.9 million (+54% 2018) 152 companies assisted in Portfolio of tourism in 75 municipalities 2019
S T R A T E G Y INNOVATION HUBBLE Environment integrated with the state's innovation ecosystem to provide connections, exchange of experiences and ideas to discuss and generate solutions for Minas Gerais. 1 st BATCH RESULTS Release of the 2 nd Batch in 2019 with 13 selected startups 81 15 256 30 Direct Startups Contracts Mapped Created POCs Jobs FINANCING FOR BRL 8.3 million BRL 7.5 million INNOVATION Of income (+107,8%) In investments BRL 160 million More than 5,600 people Portfolio for Innovation 2019 Impacted directly in 84 events.
S T R A T E G Y AGRICULTURE SUSTAINABLE AGRICULTURE AND NATURAL RESOURCE MANAGEMENT FOREST PRODUCTION AND IRRIGATION REFORESTATION BRL 4.7 million BRL 28.8 million Portfolio in 2019 Balance of portfolio in 2019 OTHER LINES FOR AGRIBUSINESS: BRL 249.7 million BRL 215.5 million Portfolio balance of products using Portfolio of FUNCAFÉ, Agribusiness Credit Letter (LCA) resources intended for coffee crop
P A R T N E R S H I P S BDMG AS A SHARING KNOWLEDGE PLATAFORM | 2019 INTERNATIONAL EVENTS [SEPTEMBER 2019] [DECEMBER 2019] [OCTOBER 2019]
P A R T N E R S H I P S PARTNERSHIP FOR SUSTAINABLE DEVELOPMENT TECHNICAL COOPERATION AND OTHER PARTNERSHIPS 1. Impact measurement tools Study alternatives for MG focused on 2030 Agenda development and support 2. Carbon calculator projects for state economic 3. New funding lines diversification 4. Expertise in PPPs Technical cooperation to FiBraS Project: technical work in accordance to EIB assistance for the E&S standards development of green financial products for MSMEs
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