Brazil Expands BNDES Aviation Financing Facility to R$13.6 Billion

Brazil’s National Civil Aviation Fund (FNAC) has increased the size of its financing agreement with the Brazilian Development Bank (BNDES) to R$13.56 billion, expanding funding available to the country’s airlines through 2030.

The amended agreement raises the facility from its original R$4 billion to R$13.56 billion and incorporates a financing program approved earlier this year. The package includes R$8 billion in emergency working capital loans and R$5.56 billion for long-term investments, including aircraft acquisitions, fleet modernization, maintenance, sustainable aviation fuel (SAF) purchases and aviation infrastructure.

Under the working capital program, Gol, LATAM Airlines Brasil and Azul are each eligible to borrow up to R$2.5 billion through loans carrying a 4% annual interest rate with maturities of up to 60 months and principal grace periods of up to 12 months. Airlines receiving the funding will be prohibited from paying dividends during the grace period.

The long-term financing program will provide up to R$1.8 billion each to Gol, LATAM Airlines Brasil and Azul for fleet expansion and modernization projects, with interest rates ranging from 6.5% to 7.5% depending on the investment. Participating airlines must also increase service to strategic regions, including Brazil’s Legal Amazon and Northeast, as part of the program’s conditions.

BNDES will administer the financing program, while participating airlines will remain subject to the bank’s credit and eligibility assessments before funds are disbursed.