The Brazilian Development Bank

1. The Brazilian Development Bank BRAZILSummit 2009 BNDES: Financing the Infrastructure Sector MAURICIO BORGES LEMOS April 2009

2. The Brazilian Development Bank INSTITUTIONAL

3. Mission and Vision Mission To foster sustainable and competitive development in the Brazilian economy, generating employment and reducing social and regional inequalities. Vision To be the development bank of Brazil, innovative, outstanding, and to proactively tackle the challenges of our society.

4. Founded on June 20th, 1952 100% state company under private law Key instrument for implementation of Federal Government’s industrial and infrastructure policies Main provider of long-term financing in Brazil Emphasis on financing investment projects Brazilian Export Bank Equity investor through BNDESPAR BNDES Highlights

5. Group Structure As of Dec 31th, 2008 Consolidated Assets R$ 277.3 billion US$ 118.7 billion BNDES Finances long-term investments BNDESPAR FINAME Finances capital goods purchases and foreign trade Equity Participation

6. Areas of Activity Innovation To support investments, promoting technological innovation and competitiveness. Infrastructure Access to electric energy, telecommunications, urban transport, water supply and sanitation, increasing the offer of services ahead of demand to avoid harm to economic growth. Productive structure To increase industry production capacity. To make industry and service sectors more effective. To prioritize small and medium-sized companies. To support international business of Brazilian companies. Exports To promote external sales and reduce imports. Technological investments to increase content value of consumer goods. Social inclusion Conditions and stimuli to intensify social benefits are established for the concession of BNDES credit.

7. The Brazilian Development Bank FINANCIAL DATA

8. Indicators US$ billion Total Assets 118.6 Loans and Interbank Onlending 92.4 Shareholders’ Equity 10.8 Net Income 2.9 Taxes 1.1 As of Dec 31th, 2008

9. Ratios R$ million 2005 2008 2006 2007 52,280 64,892 Disbursements 47,085 92,235 187,475 202,652 Total Assets 174,967 277,294 6,331 7,314 Net Income 3,202 5,313 19,092 24,923 Shareholders’ Equity 15,710 28,773 ROE (%) 21.47 21.17 36.38 33,23 Operational Expenses/Assets (%) 0.41 0.39 0.38 0.39 23.2 1 26.7 1 BIS Ratio(%) 16.7 17.7 1 Non-performing loans (%) 0.86 0.68 0.11 0.15 1Rise in reference equity (net equity + subordinate debt + hybrid instruments) has increased BNDES’ Basel Index

10. Annual Disbursements Converted to US dollar on the disbursement dates

11. Disbursements by Business Sector

12. BNDES vs. Multilateral Banks IDB = Inter-American Development Bank IBRD = The International Bank for Reconstruction and Development (World Bank) (*) Unlike other institutions, 12-month fiscal year ends June 30th CAF = Corporación Andina de Fomento

13. Funding 2007 – Capital Structure As of December 31st, 2008

14. The Brazilian Development Bank INFRASTRUCTURE INVESTMENTS

15. The BNDES' actions in the infrastructure sector are aimed at: • expanding and modernizing the electric sector; • diversifying the national energy grid; • developing the natural gas market; • promoting renewable energies; • increasing the supply of biofuels; • evaluating and working on the logistical bottlenecks surrounding cities and access to ports, aimed at improving the systems' efficiency; and • expanding telecommunications systems and contributing to the development of cutting-edge, nationally-produced, technological products.

16. R$ million 19.190 14.005 9.343 9.201 7.190 5.325 5.203 4.251 4.419 4.000 2.096 Disbursements for infrastructure

17. PAC Projects in the BNDES Source: BNDES

18. PAC Projects in the BNDES Contracted and approved: • Generation of 2,414 MW of electric energy; • Construction of 3,688 Km of Transmission Lines; • Construction of 3,299 Km of pipeline; • Construction of 167 vessels for navigation and to support off-shore activities; • Maintenance and restoration of 522 km of highways; and • Construction of 2,437 km of railroads. In review: • Generation of 4,966 MW of electric energy; • Construction of 3,979 Km of Transmission Lines; • Construction of 97 vessels for navigation and to support off-shore activities; and • Maintenance and restoration of 2,079 Km of highways. 18

19. PAC Projects in perspective Source: BNDES

20. Belém São Luís Fortaleza Tocantins Natal Teresina João Pessoa Parnaíba Recife Maceió São Francisco Aracajú Salvador Cuiabá Brasília Goiânia Paranaíba Belo Horizonte Campo Grande Grande Vitória Paraná/Tietê Paraíba do Sul Rio de Janeiro Paranapanema São Paulo Itaipu Iguaçu Curitiba Uruguai Argentina Florianópolis Jacui Porto Alegre The Brazilian Development Bank INVESTMENT PROSPECTS

21. Infrastructure leads the growth investment in coming years Source: BNDES 21

22. Oil & Gas represent more than half of industrial investment Source: BNDES 22

23. Investments in infrastructure are confirmed Source: BNDES 23

24. Investment Prospects • The energy sector is highlighted by the high number of projects. In electricity, programs are linked to the government’s investment contracts for the supply of energy. • In oil & gas, investments in oil exploitation are linked to a long-term cycle, which will be sustained by the opening of the pre-salt.  • In telecommunications, the on-going development of new technologies requires that companies make large investment, at the risk of losing significant market share.

25. Investment Prospects • The existence of major projects already underway means that investments must be maintained at high levels after the period 2004/07.  • This is due to the existence of a cycle of robust investments in sectors that account for a significant portion of gross formation offixed capital in the economy.

26. The Brazilian Development Bank www.bndes.gov.br/english