October 3, 2017 / 4:25 PM / in a year

Brazil's BNDES seeks alternative funding to repay Treasury - director

BRASILIA, Oct 3 (Reuters) - Brazil’s state development bank BNDES will need alternative funding sources to meet the government’s demand to pay back 180 billion reais ($57 billion) by next year, a BNDES director said on Tuesday.

“We have cash but most of it is already committed to lending operations,” said Carlos Alexandre da Costa, BNDES credit director, at a telecoms event in Sao Paulo.

He did not elaborate on what the alternative funding sources might be.

Costa echoed remarks by the bank’s president Paulo Rabello de Castro, who has warned BNDES may not have enough resources to repay loans made for successive capital injections by the bank. Returning the money will help the government narrow a larger-than-expected budget deficit this year and next year.

BNDES returned the first part of the 180 billion reais requested by the government last week with the transfer of 33 billion reais to the Treasury. BNDES is expected to repay an additional 17 billion reais this year and 130 billion reais in 2018.

$1 = 3.14 reais Reporting by Silvio Cascione and Alberto Alerigi, Editing by Rosalba O'Brien

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