Obama to Offer Deal Allowing US Companies Involvement in Rio Prep.
By Community | February 25, 2011
US President Barack Obama is set to offer a new financing deal that will allow United States companies more opportunity to get involved in preparations for the 2014 FIFA World Cup and the 2016 Olympics and Paralympics in Rio de Janeiro, when he visits Brazil next month.
The financing scheme, which would be worth in excess of hundreds of millions of dollars annually, has been under discussion between the two Governments for several months now and is set to be formally announced when Obama travels to Brazil on March 19 and 20.
Obama was closely linked with Chicago’s bid to host the 2016 Olympics, even turning up for the final vote at the International Olympic Committee (IOC) Session at Copenhagen in October 2009, where Rio were awarded the Games.
The vehicle for the financing will be the Export-Import Bank of the United States, or Ex-Im Bank, which has seen its role expand dramatically in the last two years as the Obama administration looks for business opportunities abroad.
According to the company’s Chairman, Fred P. Hochberg, Ex-Im Bank seeks to make an unspecified amount of funding available for US-based companies and US subsidiaries of multinationals to help build roads and other infrastructure projects in Brazil.
It is difficult for foreign companies to earn major building contracts in Brazil unless they partner with a company already established there.
Hochberg told Reuters: “Brazil is a place where we see major promise, a lot of potential for cooperation.
“Investment in infrastructure (in emerging markets) is growing at a level we’ve never seen before.”
Funds for joint US-Brazilian projects in other countries would be provided through a “co-financing” deal between Ex-Im Bank and Brazil’s state-run development bank, BNDES.
Such arrangements provide a “one-stop shop” with one set of documents and financing conditions for joint ventures.
Ex-Im Bank last year authorised a record high US$24.5bn in loans, guarantees and insurance worldwide.