Brazil pumps $798 mln into bank BNDES capital base

* Shares of Eletrobras will be ceded as part of deal

* Follows capital injection into BNDES, Caixa last week

SAO PAULO, Aug 31 (BestGrowthStock) – Brazil’s federal government
on Tuesday injected 1.4 billion reais ($798 million) into the
capital base of state-controlled development bank BNDES, which
is poised to lend a record amount this year.

The government will cede shares in state-controlled
electricity utility Eletrobras (ELET6.SA: ) (ELET3.SA: ) to Rio de
Janeiro-based BNDES as part of the plan, according to a post in
the official government gazette. The gazette did not say what
the BNDES would give the government in exchange for the
Eletrobras shares.

Last week, the government transferred about 7 billion reais
worth of Petrobras stock into BNDES and Brasilia-based Caixa
Economica Federal, Brazil’s largest mortgage lender.

The decision underscores President Luiz Inacio Lula da
Silva’s wish to strengthen the balance sheets of state lenders
so they can ramp up lending beyond the end of his term in
December.

BNDES [BNDES.UL] is expected to lend a record 150 billion
reais this year.

Since the onset of the global financial crisis in 2008,
Lula has instructed BNDES and Caixa to help fund 1 trillion
reais of infrastructure projects as well as the creation of
home-grown conglomerates to boost job creation and economic
growth.

The National Treasury declined to comment on the injection
of funds into BNDES. A bank spokesman said a comment might be
issued later in the day.
($1=1.755 reais)
(Reporting by Guillermo Parra-Bernal and Cesar Bianconi;
editing by John Wallace)

Brazil pumps $798 mln into bank BNDES capital base