The Brazilian government has earmarked R$4 billion in subsidized credit for the fertilizer and critical minerals sectors in the third phase of the Brasil Soberano (Sovereign Brazil) program, a package launched in response to the 37.5% tariff imposed by the United States in July. The allocation was approved by the program's interministerial council and published in Monday's (24) edition of the Federal Official Gazette, according to G1.
The R$4 billion represents about 29% of the R$13.5 billion made available by the Treasury for the credit line, even though fertilizers and critical minerals are not among the products targeted by the U.S. tariffs, Folha de S.Paulo reports. The largest share, R$5 billion (37%), goes to exporters and suppliers directly hit by the American tariffs, such as processed wood, footwear and machinery. Another R$3.5 billion will support companies that trade with Persian Gulf countries and were affected by the closure of the Strait of Hormuz, and R$1 billion will go to sectors deemed strategic for Brazil's trade balance.
Below-market interest rates
Within the third phase, R$2 billion will fund industrial and technological projects covering mineral extraction combined with processing, refining or transformation, while another R$2 billion will finance the production of fertilizers and intermediate inputs, G1 details. The government projects interest rates of 3% to 9.8%, generally below market levels: working capital lines will carry the highest rates, while the critical minerals line will have the program's lowest rate, according to Folha. The credit line still requires a resolution from the National Monetary Council (CMN), the country's top financial policy body, before it can start operating.
For fertilizers, the goal is to cut a chronic reliance on imports in a sector that is essential to Brazilian agriculture. Importers have faced scarcity and high international prices since the closure of the Strait of Hormuz and amid the war in Ukraine, and the government wants to boost domestic production, Folha reports.
The credit lines will be open to exporting companies, cooperatives and associations of industrial goods and their suppliers, as well as producers and exporters in agriculture, livestock and fishing and companies tied to mineral exports. Funds may be used to buy machinery, reinforce working capital or invest in technological innovation, among other purposes.
On top of the R$13.5 billion already regulated, state development bank BNDES will contribute R$5 billion of its own resources to Brasil Soberano, bringing the total to R$18.5 billion, according to Folha. The bank will also oversee the operations and must send monthly reports to the interministerial council on approved proposals, signed contracts and amounts actually disbursed, G1 reports.