Banking Amazon Destruction: BNDES

Protesting what BNDES does with our moneyBrazil's national bank, or Banco Nacional de Desenvolvimento Econômico e Social (BNDES), has grown dramatically in recent years, with its loans far exceeding that of the World Bank.1 Its gross disbursements reached US$69 billion in 2009, double the amount from two years prior, thanks to the surge in Brazil's economy, which is expected to grow more than five percent annually from 2010 to 2014.2 With BNDES' growth, its investments now extend beyond Brazil to all corners of Latin America. With this scope of investment and the responsibility attached to spending immense amounts of public funds, BNDES should demonstrate a high level of accountability, safeguards, and transparency. BNDES, however, trails in the industry and its track record falls short.

Funding Environmental and Social Destructive Projects

BNDES's egregious lending shows little regard for its environmental and social impacts. A case in point is the bank's backing the controversial Belo Monte Dam, what would be the third-largest dam in the world. Like the Madeira River dams before it, Belo Monte is expected to have devastating consequences for the ecosystem and inhabitants, displacing entire communities, threatening food security and biodiversity, increasing exposure to disease and straining already weak social services. With its investments in cattle ranching, soybean plantations and mining, BNDES' funding of the dams will cement its ranking as the largest driver of deforestation in Brazil.

Economically Unviable

In addition to supporting unsustainable and damaging projects, BNDES is also funding projects that are not economically viable. While the bank is funding approximately one-third of the Madeira dams, the national bank is also funding an unprecedented 80 percent of Belo Monte's $17 billion price tag. Critics point out that projects of this scale would never get the financial green light without BNDES' contribution. As Raul do Vale of Brazilian NGO Instituto Socioambiental suggests, taxpayers and workers with investments in pension funds would be effectively and unknowingly subsidizing what investors are afraid to touch. Add to this Belo Monte's projected low return on investment—or a 28 percent chance of a positive yield in its first 50 years of operation—and the mega dam project looks less like a panacea and more like a boondoggle. Indeed, its low energy efficiency will make it necessary for the government to build three additional dams upstream of Belo Monte, making it a boom for private contractors and a bust for Brazil's taxpayers, riparian communities and Amazon rainforest.

Brazilian Organizations Respond

BNDES' lending has proven socially and environmentally irresponsible, and economically unviable. In the face of unscrupulous practices with public money, Brazilian civil society is making clear demands: transparency and accountability. In November 2009, 30 groups known as the Plataforma BNDES came together for a three-day summit, hailed as the first South American gathering of groups affected by projects that are fueled by BNDES financing. The gathering brought together representatives of impacted communities from across Brazil, as well as leaders from Bolivia and Ecuador, where the bank's disastrous lending policies have spread impacts beyond Brazil's border. Organizers called for greater stakeholder involvement, and clearly-articulated and -implemented social and environmental safeguards for all loans. Indigenous groups, in turn, have repeatedly voiced outrage over the bank's practices, most recently against the proposed Belo Monte dam in the Xingu River. Without the support of national and international public opinion, however, BNDES will continue to bank Brazil's socially and environmentally catastrophic development policy in the Amazon and beyond.


  1. The Economist, August 5, 2010.
  2. Bloomberg, August 10, 2010.


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