| RIO DE JANEIRO
RIO DE JANEIRO Oct 11 State development bank
BNDES has temporarily frozen loan disbursements worth $4.7
billion for several major engineering firms ensnared in Brazil's
biggest corruption investigation.
The suspension was enacted in May but only made public on
Tuesday by Ricardo Ramos, director of the bank's exports
division. The move blocks funding for builders OdebrechtSA
, Grupo OAS SA, Construtora Queiroz Galvão
SA, Construtora Camargo Corrêa SA and Andrade
The decision affects 25 projects worth $7 billion, of which
$2.3 billion have already been paid out by BNDES in projects in
Argentina, Cuba, Venezuela, Guatemala, Honduras, the Dominican
Republic, Angola, Mozambique and Ghana, Ramos said.
BNDES' funding is a target of federal investigators leading
the probe at state firms, especially Petróleo Brasileiro SA.
On Monday, prosecutors charged former Brazilian President
Luiz Inacio Lula da Silva; former Odebrecht chief executive
officer Marcelo Bahia Odebrecht, who is already serving a
19-year sentence for separate corruption charges in the
Petrobras case, and nine others over allegations that Lula
secured BNDES funding for Odebrecht projects in Angola.
In return, prosecutors said, Odebrecht bribed Lula and some
people close to him. Lifting the credit ban would be determined
on a "case by case" basis, Ramos told journalists.
"We're in an difficult moment and we have to take care, as
it's public money, on how we go forward," Ramos said.
The BNDES move was made after Brazil's Prosecutor-General's
Office announced earlier this year that it would take legal
action so that companies that received financing from the public
bank repaid any money involved in the Petrobras kickback scheme,
To get the frozen loans freed, all projects would need to
meet new criteria.
That includes proving the project makes physical progress -
and the BNDES using satellite monitoring to confirm it; that
BNDES was not the sole provider of funds for the work; and the
regular monitoring of the evolving credit risks for BNDES funds
tied up in each project.
(Reporting by Rodrigo Viga Gaier; Writing by Brad Brooks;
editing by Grant McCool)