A $50 million loan from the Inter-American Development Bank (IDB) will help the State of Santa Catarina in Brazil modernize its fiscal management and enhance how it administers taxes and manages public spending.

The loan is part of Brazil Fiscal Management Modernization Program, Profisco II, which supports all 26 Brazilian states and the Federal District. Santa Catarina is the eighteenth Brazilian state to receive financing from this program. 

The resources for modernizing Santa Catarina's fiscal management will fund a program with three components. The first is designed to improve management instruments, modernize technological infrastructure, and increase fiscal transparency. The second will simplify tax compliance for taxpayers, streamline tax collection, and expand government revenue to fund programs that serve the population’s needs. Finally, the third component focuses on tightening fiscal discipline and on more effective and efficient government spending.

This program in Santa Catarina will boost the sustainability of public finances so that the government and private sectors and citizens in general can benefit from better services and infrastructure, easier and less costly tax compliance, more readily available information for public management, and greater transparency.

The Profisco II Program, which includes this financing for the state of Santa Catarina, operates through a $900 million conditional credit line for investment projects (CCLIP) approved in 2017. This line of credit finances projects by individual state governments, with support from the federal government, which provides sovereign guarantees for the program's loans on behalf of the states.

The loan to Santa Catarina has a 25-year repayment term, a six-year grace period, and an interest rate based on the Secured Overnight Financing Rate (SOFR).