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BNDES finances export of 32 Embraer E175 jets to America
The Brazilian Development Bank (BNDES) has concluded a financing agreement for the export of 32 Embraer E175 commercial jets to American Airlines. The operation, worth approximately R$4.5 billion, is being carried out through BNDES Exim Post-Shipment, a direct credit line from the Bank for the sale of domestic products intended for export.
The announcement was made today at a ceremony at Embraer’s headquarters in São José dos Campos, in the interior of São Paulo, which was attended by the President of the Republic, Luiz Inácio Lula da Silva, the Vice President of the Republic, Geraldo Alckmin, the Minister of Ports and Airports, Silvio Costa Filho, and the President of BNDES, Aloizio Mercadante, among other authorities.
BNDES’ support has been fundamental for the Brazilian aeronautical industry, considered strategic due to its high technological content, generation of highly qualified jobs and development of innovations with positive social impacts.
“This financing will help accelerate the production and export of our aircraft to American Airlines and boost Brazil’s neo-industrialization process, increasing the country’s innovation and competitiveness,” said Francisco Gomes Neto, President and CEO of Embraer. “BNDES, with its strategic vision, has been fundamental to the development of the national industry through export financing, access to working capital resources and investment in research and development.”
Earlier this year, American Airlines announced a firm order for 90 E175 jets, with purchase rights for 43 more aircraft. The jets will be delivered with 76 seats. If all purchase rights are exercised, the deal will exceed $7 billion in value, based on list price. The value of the firm orders was included in Embraer’s backlog in the first quarter of 2024.
“BNDES is Embraer’s largest partner and has supported the export of more than 1,300 aircraft since 1997. This financing totals more than US$25 billion over the years. The continued support under President Lula’s government has helped the Brazilian company continue to be one of the three largest aircraft producers in the world, generating qualified employment and income in Brazil,” says the bank’s president, Aloizio Mercadante.
In addition to exports, BNDES also supports Embraer’s investment plan in innovation. In February, the Bank approved financing of R$500 million (US$90 million), through BNDES Mais Inovação, for the company to develop new products, processes and digital technologies for efficiency and productivity gains, as well as for sustainable air mobility, with a focus on energy transition and carbon emission reduction.
“BNDES is committed to innovation in the Brazilian aerospace industry to make it increasingly competitive and sustainable, with the capacity to expand markets and develop new technologies, in line with the Brazilian federal government’s Plano Mais Produção, on the axis of a more export-oriented and innovative industry, focused on high added value products”, explains José Luís Gordon, director of Productive Development, Innovation and Foreign Trade at BNDES.
Historically, countries with leading aeronautical industries have provided ongoing financing to their respective domestic manufacturers through development banks (DBs) and export credit agencies (ECAs) in their respective countries. In Brazil, this role is played by BNDES. The Bank’s financing complements the financing provided by the private market and allows Embraer to compete in the foreign market on an equal footing with its competitors.