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Concession of the Itaporanga-Franca Road System


To support investments aimed at the exploration of the Itaporanga-Franca Road System, concerning International Call for Tender no. 05/2016, disclosed by the Agência Reguladora de Serviços Públicos Delegados de Transporte do Estado de São Paulo (ARTESP), in December, 2016.

Who can be financed

Corporations based and managed in Brazil (the SPV). 

What can be financed

The expansion and improvements of the Itaporanga-Franca Road System, as well as the implementation of information system and control system,  the acquisition of equipment and social and environmental investments. The Capex concerning the grant, expropriations and special preservation or maintenance actions are not applicable for financial support of BNDES. The exception is the 1st cycle of asphalt rehabilitation and recovery of special civil engineering works located on the segment of the highway system named “Existent”,, which will be considered as eligible items.

Minimum loan amount

R$ 20 million. For smaller pledges, the applicable product is the BNDES Automático.

Interest Rate

Direct support (financing directly with BNDES)

Interest rate = Cost of funds + BNDES’ margin + Risk spread, as follows:

Composition of interest rates for direct support

Cost of funds = TJLP (Brazilian Long Term Interest Rate) for the 1st cycle of investment

BNDES’ margin = 1.7% p.a.

Risk spread = Up to 3.37% p.a., according to the risk of the client’s/project’s credit

Indirect support (finance done by intermediation of commercial banks)

Interest rate = Cost of funds + BNDES’ margin + Financial intermediation rate + Commercial bank spread, as follows:

Composition of interest rates for direct support

Cost of funds = TJLP (Brazilian Long Term Interest Rate), for the 1st cycle of investment

BNDES’ margin = 1.7% p.a.

Financial intermediation rate = 0.4% p.a.

Commercial bank spread = Negotiated between the institution and the client/project

See the size classification of the enterprises.

See also other fees charged in the financing contracts of BNDES (in Portuguese).

Financial conditions applicability

The TJLP’s cost  available for the 1st cycle encompasses investments which have their execution scheduled for the first ten years of concession, according to the detailing of the CAPEX component of the Technical and Economic Study of Financial Feasibility, also considering the provisions of the item “What can be financed”.

BNDES’ maximum participation

(Updated at 2.10.2017)

Up to 50% of the value of the eligible items, in TJLP cost. BNDES’ participation can be increased to up to 80% of the eligible items using the market conditions, preferably by means of infrastructure bonds issued under Brazilian law.
At least 20% of the project will have to be supported by equity.

Loan term

(Updated at 2.10.2017)

Up to 15 years, including grace period, for the loans in TJLP.

Up to 10 years, including grace period, for financing with market cost, in case this loan is not carried out via issuance of infrastructure bond.

At the discretion of BNDES, the credit operation may be divided into tranches that consider the term of execution of the investments, grace period and amortization period being counted from the provision of funds. In any event, the period elapsed between the signing of the financing contract and the last amortization cannot exceed 20  years.

Amortization schedule

Constant amortizations.

Debt sizing

The maximum allowed debt amount will be determined considering the project’s cash generation. The project shall be able to maintain an annual Debt-Service Coverage Ratio (ICSD – Índice de Cobertura do Serviço da Dívida) of at least 1.30.


The loan will be structured either as a corporate finance or as project finance, according to BNDES’ rules applicable to each category and may include the definition of a physical-financial completion.

The securities will be determined after the consideration of the technical-economic analysis of the Project and of the stakeholders, and may include:

Pre-completion securities

  • Corporate guarantee or stand-by letter of credit;
  • bank or corporate guarantee;
  • pledge over SPV shares;
  • pledge or fiduciary ownership over the emerging rights of the concession;
  • pledge or fiduciary ownership  over the project and accounts receivables from tariff or non-tariff revenues ;
  • security deposits of at least 3 times the debt service; and
  • insurance package, which shall name the creditors as loss payees, which shall include, at least, the insurances demanded by the concession contract.
    Observation: When a stand-by letter of credit for the total outstanding debt is issued, the relevant financial institution will have priority accessing other project security.

Post-completion securities

  • pledge over SPV shares;
  • pledge or fiduciary ownership over the emerging rights of the concession;
  • pledge or fiduciary ownership  over the project and accounts receivables;
  • security deposits of at least three times the debt service; and
  • insurance package, which shall name the creditors as loss payees, which shall at least include the insurances demanded by the concession contract.


  1. The project securities will only be shared with other debts related to the financing of the CAPEX of the project. The security will not be shared with any debts in connection with the concession fee payment.
  2. For the purpose of calculation of the DSCR, the debts incurred for the funding of the concession fee will also be considered.
  3. A loan structured as project finance will reach financial completion after achieving a DSCR of 1.30 or higher in two consecutive years, and the participation of equity in the capital structure of the Concessionaire exceeds 20%. Completion will also require the evidence that the works financed are fully executed, that the Concessionaire is complying the payment agreement with BNDES and granting authority and that there is no material changes. 
    EBITDAt = Operating Income + Depreciation and Amortization + Financial Expenditures - Financial Income +/- Equity Pick-up +/- Impairments for year “t”
    ¹ The debt service for the funding of the concession fee included.

    For indirect support: they will be negotiated between the commercial bank and the client.

    Learn more about the securities with resources from BNDES (in Portuguese).


BNDES disbursements will be made proportionally to the BNDES loan participation applied at the investment amount made in eligible items within each period.

Infrastructure bonds

Besides the loans extended under the financial conditions herein presented, BNDES might also subscribe up to 50% of the infrastructure bonds emitted under Brazilian law by the SPV to finance the project’s implementation.

Additional requirements

  1. The BNDES loan agreement will include corporate governance obligations, such as rules related to transactions with related parties (TRP), which will at least include:
  • TRP above a predefined amount will be subject to approval by the Board of Directors (the Board), excluding members with potentially conflicting interests;
  • The Board  shall consider at least three proposals, with corresponding values and quantities, by companies with similar know-how before approving a TRP;
  • The Board shall have an independent committee to support the analysis of each TRP. The independent committee shall provide an opinion with its favorable or not favorable conclusion about each TRP.
  • Nevertheless, the minority shareholders with at least 5% of the voting shares shall have the right to request an opinion by an independent entity.
  • Relevant facts must be disclosed whenever TRP is contracted, with the approval of the Board.
    Furthermore, a note about the related-party transactions shall be included in the explanatory notes of the Quarterly Financial Results, containing the disclosures foreseen in the accounting rules which are applicable to the annual financial statements.
  • The verification of whether the mechanisms established above have been properly implemented must be the object of an annual external audit, at the expense of the company.
  1. BNDES will also require disclosure of operational data on the internet in a level of detail set by BNDES, with monthly updates and of accounting balance sheets, with quarterly updates.
  2. BNDES will also include, in its loan agreement, the obligation of contracting a managing/certifier company, at the expense and in agreement with BNDES, which will act on behalf of the creditors, including bondholders, especially in the production of reports about the reasonableness of CAPEX (Capital Expenditure), the physical progress of the work, the fulfilment of the granting obligations, enterprise risk management, and the technical analysis of events that result in pleas to the granting authority.
  3. For equity participation through Private Equity Funds (FIP – Fundos de Investimentos em Participações), in addition to the requirements of warranties mentioned above, the following will be required:
  • Approval by the Investment Committee of the FIP of the resources needed for the contribution of its respective participation in the project, also including a prediction of an increase of the amount of 30% of its participation in the equity to accompany any contributions that may be needed;

Note: This item does not apply  in the case of a full coverage bank guarantee;

  • Identification of participant shareholders, of the manager and administrator; and
  • Presentation of the regulation of the FIP.

Debt availability

This document states indicative financial conditions for the investments foreseen in the International Call for Tender No. 065/2016, disclosed by the State of São Paulo for the exploration of the Itaporanga-Franca Road System, and does not necessarily imply the right of obtaining the funding by the future winner of the competition. After signing the concession contract, the SPV will be responsible for submitting an application for a BNDES loan, which will run its own credit/KYC analysis of the SPV, its shareholders and potential guarantors, and of all legal, financial and environmental aspects of the submitted project.

How to request

The loan applications should be mailed directly to BNDES by the SPV or to one of the registered financial institutions, following the standard form, to:

Banco Nacional de Desenvolvimento Econômico e Social – BNDES
Área de Planejamento e Pesquisa – APP
Departamento de Prioridades – DEPRI
Av. República do Chile, 100 – Protocolo – Térreo
20031-917 – Rio de Janeiro – RJ

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