To assist the ethanol sector, which is a major employer and has been suffering a sharp drop in consumption due to the Covid-19 pandemic, the BNDES board approved this Thursday, 4, a credit program for working capital linked to the storage of product. As an incentive to preserve jobs, supported companies will not be able to reduce their permanent staff for two months. In addition, those that maintain or increase jobs in the next 12 months will be cheaper.

In order to expand the resources directed to the sector, the Bank will act in conjunction with commercial banks: in each financing, these commercial banks will have to offer at least the same amount as BNDES. The measure will give power to the plants to face the period and will reduce the risk of energy shortages at the time of economic recovery.

The sector is responsible for 1 million jobs in the interior of the country and for the generation of US$ 10 billion in exports per year. A survey conducted by IBRE / FGV in March points to the oil and biofuels market as the most affected by the crisis. Biofuels suffered from a decrease in consumption of over 30% and also from a drop in the international price of oil - which made ethanol less competitive. In addition, sugar and alcohol companies face a low cash flow due to the beginning of the harvest period, which runs from April to December.

With an endowment of R$ 1.5 billion, the BNDES Support Program for the Sugar and Alcohol Sector will provide credit between R$ 10 million and 200 million, limited to 50% of the financing amount, and will be available to companies, cooperatives and individual entrepreneurs with revenue gross operating income of R$ 300 million or more. The financing can be obtained directly from BNDES, indirectly - via financial agents - or mixed. Joint action with commercial banks can therefore increase support to the sector to more than R$ 3 billion.

The payment term is up to two years, with a grace period of up to 12 months. The fuel stock can be presented as collateral for the loans. Orders can be filed until September 30.

Sugarcane - Sugarcane is the second largest source of the Brazilian energy matrix, with a 16% share. In addition to supplying 70% of the national car fleet - contributing to less dependence on the foreign oil market - the fuel reduces carbon dioxide emissions by up to 90% compared to gasoline and diesel.

Emergency Measures - The Sugar and Alcohol Sector Support Program joins other recent BNDES measures to combat the economic effects of the crisis resulting from the pandemic of the new coronavirus, such as the emergency line for health and the expansion of credit to Micro, Small and Medium Enterprises. Learn more about BNDES against coronavirus.