BRAZILIAN FUNDING SUSPENSION

Brazil’s National Economic and Social Development Bank (BNDES) announced on Tuesday that it has suspended funding for projects of 25 companies under investigation for corruption, including construction work in Mozambique and Angola.The Brazilian companies are being investigated under Operacao Lavo Jato (Operation Car Wash), an investigation undertaken by the Brazilian Federal Police into allegations of money laundering and corruption. BNDES names the companies concerned as Odebrecht, OAS, Queiroz Galvão, Camargo Corrêa and Andrade Gutierrez.According to a report carried by the Portuguse news agency Lusa, the main project in Mozambique at risk of losing its funding is the Moamba Major dam, on the Incomati river in Maputo province, which would have received 320 million US dollars via BNDES. The total cost of the dam is put at 466 million dollars. 

When built, this dam will be able to store 760 million cubic metres of water and control flooding in the Incomati valley. The dam would facilitate irrigated agriculture, and would also contain a power station capable of generating 15 megawatts of electricity. The work was to have been concluded by late 2019.The Brazilian company hired to work on Moamba Major is Andrade Gutierrez. The first stone was laid in November 2014 at a ceremony attended by the then president, Armando Guebuza, but construction of the dam proper did not start until May 2016. By late June of this year, work on the dam was said to be seven per cent complete. The 25 projects affected by the BNDES suspension of funding cost a total of over seven billion US dollars, of which 2.3 billion has already been paid out. In addition to Moamba Major, the BNDES move affects four projects in Angola, seven in Venezuela, seven in the Dominican Republic, two in Argentina, and one each in Cuba, Ghana, Guatemala and Honduras.BNDES funding of infrastructure projects outside of Brazil has been shrouded in suspicions of over-invoicing and of favouritism to certain companies. BNDES has drawn up new criteria for financing exports of engineering and construction services taking into consideration recommendations made by the Accounts Tribunal, arising from its audits.