IDB Approves $100 Million to Foster Investment Environment in Brazil

WASHINGTON – The Inter-American Development Bank (IDB) has approved new financing to support the Brazilian government's efforts to foster a favorable environment for investment and private sector activity. The operation strengthens the Institutional Reforms Program for Competitiveness and Business Improvement, in partnership with the Ministry of Development, Industry, Trade, and Services.

With financing of $100 million, or approximately R$ 560 million, in the form of a policy-based loan (PBL), the program aims to consolidate progress made in this area and promote the medium- and long-term sustainability of reforms that reduce transactional costs for the private sector in the country.

Expected results of the program by 2027 include strengthening institutional capacity for regulatory policy; increasing deposits and reducing processing time for patents; reducing the number of import licenses and processing times through the New Import Process of the Single Foreign Trade Portal Program; as well as increasing credit for MSMEs, women-led exporting companies, and the number of verified sustainable infrastructure projects.

Brazil has been advancing a reform agenda to enhance competitiveness and improve the business environment. In recent years, the IDB has supported this agenda with knowledge and technical cooperation, which now gains new momentum with this approval.

“Strengthening institutions so they increasingly act as catalysts for productivity and sustainable, inclusive growth is a central part of our strategy to support the country’s development, and this operation is emblematic in that regard,” said Annette Killmer, Head of the IDB Representation in Brazil.

The program also aligns with the IDB’s commitment to promote development in Latin America and the Caribbean by working with the public sector to create an enabling environment for private investment.

The so-called “Custo Brasil” (Brazil Cost), identified by the private sector as one of the main factors increasing business operating costs and limiting investment in the country, amounts to R$ 1.7 trillion, according to a study by the Competitive Brazil Movement. The IDB-approved operation seeks to address this challenge by targeting the root causes of these structural difficulties.

The $100 million loan has a 20-year amortization period, a 5.5-year grace period, and interest based on the SOFR rate.