Speaking in Buenos Aires, in the sidelines of the conference of the Latin American and Caribbean communities (CELAC), Brazilian president Luis Inacio Lula da Silva announced that the country’s development Bank, BNDES, could resume the financial support to engineering projects abroad.
Lula was quoted by local press as saying that BNDES could support the development of the Vaca Muerta gas pipeline, under construction in Argentina by the steel and piping producer Techint, with steel plates being supplied by the Brazilian steel producer Usiminas, which is linked to Techint.
The pipeline will link the Vaca Muerta shale gas reserves, in the Patagonian region, to the region of Buenos Aires.
The amount of the loan is now estimated at $820 million, but previous evaluation pointed that it could be limited to $689 million.
The financial support by BNDES could be the solution for the viability of the project, as Argentina is in a financial crisis, with an annual inflation rate reaching 100 percent, while the country is lacking the foreign currencies needed to import items not produced locally.
The BNDES support remains facing opposition among politicians in Brazil, as many similar loans granted by BNDES to Latin American countries were not paid in the past.