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Brazil’s Espírito Santo State to bolster tourism with $48 million loan from IDB

An emphasis on culinary tourism is expected to increase formal employment in the state

The Inter-American Development Bank has approved a $48 million loan for tourism along Brazil’s coastal state of Espírito Santo with a special emphasis on culinary tourism. The Tourism Department of the State of Espírito Santo (SETUR) will use these funds to conduct market studies about visitor preferences and expectations, bolster the state’s formal economy, increase year-round tourism and improve the state’s capacity to protect the environment in tourism destinations.

The loan aims to help Espírito Santo compete with its neighbors. In 2011, the state contributed just 4.3 percent to the gross domestic product (GDP) of Brazil’s Southeast, a four-state region that earned 55.4 percent of the country’s overall GDP. Other Southeastern states see tourism throughout the year, but in Espírito Santo a three-month peak account for more than 50 percent of its current tourism arrivals.

This loan is part of an $80 million program, which also includes $32 million in local funding. Half of the program’s funds will be used to broaden options for tourist consumption, especially in the area of culinary tourism.

Brazilian travelers typically give high priority to dining on local cuisine, so capturing both leisure and business customers would help to improve linkages between the providers of culinary tourism services and the local suppliers of raw materials. As such, this part of the program will fund tourism value chain studies to improve food growing and fisheries in the low season and offer grants to entrepreneurs living below the poverty line.

The loan also earmarks $8.14 million for promoting and monitoring the impact of tourism campaigns, and $2.44 million improving the state tourism statistical system and broadening the reach of SETUR.

To accommodate for the projected increase in visitors, the remaining $21.16 million will fund investment in infrastructure and basic services, such as the expansion of a wastewater treatment system and socio-environmental services along the state’s coastline.

The loan is for a 24-year term, with a 114-month grace period and an interest rate based on LIBOR.