CAF announces aid package of up to US$746 million for the recovery of Rio Grande do Sul

The executive president of CAF - Development Bank of Latin America and the Caribbean, Sergio Diaz-Granados, announced a package of measures with the potential to reach 3.8 billion reais (US$ 746 million) in financial resources to support the reconstruction of Rio Grande do Sul after the record rains recorded in the state.

“We express our absolute solidarity with the country and make ourselves available to support the immediate relief work for the victims and the reconstruction of the state's infrastructure, in coordination with the guidelines of the federal, regional and municipal governments,” said CAF's Executive President. “We are ready and shoulder to shoulder with Brazil in this difficult process that will soon begin,” he added.

CAF made available immediately to the Ministry of Planning and Budget a donation of R$1.25 million (US$250,000) to support emergency work and R$5 million (US$1,000,000) in non-reimbursable technical cooperation already available, which will be used for climate mitigation actions.

The remaining R$3.8 billion (US$746 million) will be distributed as follows:

• $306 million (US$60 million) in a line of credit to the Development Bank of the Extreme South (BRDE), with reduced interest and longer terms, so that this money will reach the people affected by the catastrophe, to rebuild housing, help micro and small businesses, improve the environment and rebuild infrastructure.
• 382 million reais (US$75 million), which could be allocated to the Reconstruction and Climate Resilience Program, through a loan to the federal government, to finance priority governmental works and actions.
• Sovereign loan of up to R$408 million (US$80 million) for Porto Alegre, through the Social Innovation Program for Territorial Transformation, approved by the External Financing Commission (Cofiex), an organ of the Ministry of Planning and Budget (MPO), in September 2023.
  Credit line to BNDES for up to R$2.5 billion (US$500 million). This line was approved in 2023 and is in the process of being formalized, subject to demand for this capital from the BNDES.
• A credit line of up to R$153 million (US$30 million) to be channeled through the Badesul development agency, which is part of the state's Secretariat of Economic Development.

The Executive President also recalled that CAF's relationship with Rio Grande do Sul began in 2009. “Since then, we promote the sustainable development of this state through financing, cooperation and technical assistance, totaling about R$1.5 billion (US$300 million) in interventions,” he said.

“The magnitude of the climate crisis in Rio Grande do Sul is of historic proportions and has a catastrophic impact on the lives of the entire population. We stand by Brazil and the State at this time. We hope that, with this support, we can contribute to humanitarian recovery and we remain available to help plan for the future of the region, with which we have a historic relationship,” concluded Diaz-Granados.