The $10 Billion Check the Government Couldn’t Grab
British group offered resources to invest in infrastructure in the country, but ran into a serious problem.
Over the past 12 months, a British investment group has knocked on the doors of ministers in the Bolsonaro government. They immediately presented a very high value to invest in infrastructure in Brazil: 10 billion dollars (56 billion reais). However, the government failed to seize the check from fund manager Castlepines and it flew.
The reason for not being able to bring this money into the country is the Brazilian government’s difficulty in obtaining bank guarantees abroad. As Brazil does not have an investment grade rating – the grade granted by rating agencies to countries considered to be good payers – the country would need a foreign, investment-grade bank to provide this “anti-default” guarantee. It could be the World Bank, the IDB or even the BRICS Bank. Even private banks like JP Morgan or Goldman Sachs. Nobody reached out.
By Machado da Costa. Oct 9, 2020